Collective consciousness: another year of fast-paced development for the UK’s collective actions regime
Despite the initially stilted development of the UK’s collective proceedings regime upon its introduction in 2015, 2022 was another year of fast-paced development, in common with more recent years.
2022 saw a record number of new actions being launched: with 12 filed and a further claim announced at the time of writing - all of which are being brought as opt-out claims - and all but two alleged standalone abuses (with one claim being brought on a hybrid basis).
2022 also saw six claims certified, and, whilst some actions were given the green light without challenge from defendants, other proceedings saw disputes play out before the Court of Appeal, giving us the important decisions in BT v Le Patoureland London & South Eastern Railway Limited & Ors v Gutmann.
Further clarification of the certification standard
The Court of Appeal’s judgment in May 2022 in BT v Le Patourel, was significant in offering greater clarity on a hotly contested aspect of the certification standard: whether a claim can be pursued on an opt-in or an opt-out basis.
In short, BT had sought to challenge the Tribunal’s reasoning for certifying Mr Le Patourel’s claim on an opt-out basis but lost on all counts. Importantly, the Court of Appeal held that there was no “general presumption” in favour of opt-in actions over opt-out. Rather, the legislation was drafted neutrally and so to presume a preference in favour of opt-in claims - as BT argued that the Tribunal’s Guide to Proceedings indicated - would run counter to the legislative intent. Given the passage of time that has elapsed since the Guide was drafted and the development of the collective proceedings regime in that period, the Court of Appeal also suggested that the Guide may require updating to bring it in line with the current movement of the regime.
Additionally, the Tribunal was entitled to conclude that class members’ involvement in the claim would be limited if an opt-in claim was mandated and that the financial position of the parties (including a representative’s ability to attract third-party funding) were relevant considerations for the Tribunal in determining that the claim should proceed on an opt-out basis. For further detail on this important judgment, you can read our summary here.
The Court of Appeal’s second ruling of the year going to the certification standard came in the form of London & South Eastern Railway Limited & Ors v Gutmann. The Court once again sided with the Class Representative, dismissing all the defendant train operating companies’ arguments and offering further important guidance for the UK’s young regime.
Notably, the appeal dealt with whether issues relating to proof of liability, as opposed to quantum, could be determined upon an aggregate basis (or whether the position of each class member needed to be assessed individually). The Court of Appeal determined that a claim for aggregate damages dispensed with the need to undertake an individual assessment of causation and the amount of damages recoverable by each class member. Indeed, it would be problematic for the Tribunal (and inconsistent with the raison d’être of the collective proceedings regime) to certify a claim on an opt-out basis, but then to require the establishing of liability for each class member; thereby instigating an opt-in process “by the back door”. For further detail on this important judgment, please see our summary here.
Further consideration of the certification standard was front and centre in RoRo, as we detail further below, but also at the certification hearing in Consumers' Association (Which?) v Qualcomm Incorporated, which took place in March. The progress of the claim had previously been delayed due the defendant’s challenge to jurisdiction, which was withdrawn shortly before the scheduled hearing. Qualcomm opposed certification based on assertions such as that Which?’s expert’s proposed methodology failed the Microsoft test and an argument that Which? should be forced to obtain an Anti-Avoidance Endorsement (“AAE”) to its ATE insurance policy.
The Tribunal agreed with Which? in relation to all points. Following the first ‘hot-tub’ involving both parties’ experts at a certification hearing, the Tribunal held that Qualcomm’s contention regarding Which?’s expert methodology was “plainly wrong”. The Tribunal also noted that it was extremely unlikely that Which? - “a long-established and reputable charity, with its own in-house lawyers and an experienced team of external professional advisors” - would act in a way that would result in its ATE coverage being voided (and thus, requiring an AAE to come into play), and the cost of incepting an AAE was disproportionately high to account for this unlikely risk. Notably, Qualcomm chose not to appeal the certification decision – leading this to be the first grant of certification not to be challenged.
The extent to which the opt-out collective regime can and should be utilised by businesses as opposed to consumers was a key area of debate before the courts in 2022.
First, on 18 February 2022, the Tribunal certified the opt-out claim brought by Mark McLaren Class Representative Limited on behalf of UK car-buying individuals and businesses against the participants in a cartel relating to ‘Roll-on, Roll-off’ (“RoRo”) carriage services. The cartelists had attempted to argue that Mr McLaren’s expert methodology for assessing class-wide harm was flawed and that the Tribunal should not include “larger business purchasers" in an opt-out class (as they would be able to opt-in). Regardless, the Tribunal certified Mr McLaren’s claim on an opt-out basis and refused to carve out “larger business purchasers”. The cartelists appealed this ruling, and the Court of Appeal’s judgment is pending.
Meanwhile, the parties found themselves back before the Tribunal for a contested application, in the wake of the defendants having written directly to several “larger business purchasers” in the class regarding their class membership and some of the suggested consequences of their involvement. The Tribunal held that this was inappropriate: although not explicit, there exists a restriction inherent in the Tribunal Rules that precludes defendants from communicating with class members where a class has been certified (and similarly between proposed defendants and proposed class members at the application stage, where a collective proceedings order is being sought).
The availability of opt-out proceedings for classes comprised largely of businesses and organisations also arose in the Tribunal’s March 2022 255-page judgment in FX, where the Tribunal declined to certify either of the two competing claims relating to the Forex cartels.
In a split decision - unusual for the Tribunal - the majority held that because of concerns about the strength of the claims and its view that opt-in proceedings were practicable, it would not certify either claim on an opt-out basis. It therefore concluded that the claims should only be certified on an opt-in basis, even though it recognised that this would mean the claims would not proceed at all.
The third member of the Tribunal dissented, holding that the claims should proceed on an opt-out basis. The dissent was critical of the majority’s approach, noting the practical difficulties and costs of opt-in proceedings.
Neither application was therefore certified, albeit the Tribunal unanimously held that, if the claims had continued on an opt-out basis, they would have granted carriage of the claim to Mr Evans.
In its Order granting permission to appeal, the Tribunal noted that the applicants had a “real prospect” of persuading the Court of Appeal that the discretion exercised by the majority was sufficiently flawed to be erroneous in law. The appeals will be heard in April 2023 and will address the circumstances in which collective actions can be brought on an opt-in or opt-out basis (further to Le Patourel v BT) and the determination of the carriage dispute.
Only one business class has therefore been certified by the Tribunal so far; but it was brought on an opt-in basis: being that represented by the Road Haulage Association (RHA), in the long-awaited certification judgment in Trucks. As with FX, Trucks also saw two competing applicants - albeit the RHA was only seeking certification on an opt-in basis whereas the UK Trucks Claim (“UKTC”) presented both an opt-out claim and an opt-in claim in the alternative.
Whilst the Tribunal determined that both applications were eligible and suitable for certification, it certified only the RHA’s opt-in application (on a more limited basis than applied for), preferring it due to several factors including that it was brought on an opt-in basis, and that the Tribunal preferred the RHA’s expert methodology and relevant class definition.
The UKTC and the defendants have now sought to appeal the Tribunal’s judgment. In its Order granting permission to appeal, the Tribunal held that the majority of the UKTC’s grounds of appeal were dismissed as either not being points of law, or not having any real prospect of success. However, until the appeals are determined, the RHA’s case has been stayed.
In the meantime, the representatives also face an appeal before the Supreme Court by one of the cartelists, DAF. The issue at stake is a discrete point arising from the Tribunal’s approval of the representatives’ funding arrangements (specifically whether the provision of litigation funding can constitute a Damages Based Agreement (which are otherwise prohibited in the use of opt-out proceedings in the Tribunal)). The decision on this issue will be pivotal for the collective regime and for access to justice more broadly.
Whilst the certification standard remained a battle ground in 2022, we also saw how the Tribunal will approach the case management of opt-out claims post-certification in the form of rulings dealing with, for example, split trials and timetables to trial.
In Kent v Apple, following the first ‘on-the-spot’ certification decision earlier in the year, Apple applied to split the proceedings into two, with the issues of market definition and dominance to be determined first, and the remaining issues of abuse, causation, and quantum second. Dr Kent opposed the application on the basis that there was no ‘clean split’ between the issues and the Tribunal agreed, dismissing Apple’s application at the hearing.
Only a few weeks later, a separate panel of the Tribunal ordered that a trial for liability should be split off and heard before issues of causation and quantum in Boyle v Govia, on the basis that time, and cost, could be saved if Mr Boyle lost his case on liability. Notably, however, the parties had agreed to this split.
Regarding trial timetables, Boyle v Govia was also awarded the honour of being listed for the first substantive hearing, with this trial set to take place after the summer in 2023. The trial in Le Patourel v BT has been listed for January 2024, with Kent v Apple commencing shortly thereafter in October 2024.
A key question for the development of the collective regime to date has been how collective claims will be managed where separate claims are also being brought by claimants elsewhere in a value chain. This question was answered on 6 June 2022 when the Tribunal published its Umbrella Proceedings Practice Direction, the effect of which is that the President can now group together different proceedings that “may raise issues, concern matters, or have features that are not only particular to those proceedings but are also ubiquitous” that may then “be hosted in different Proceedings (“Host Cases”) when they arise out of a broadly similar economic and/or regulatory landscape.” In effect, this allows the Tribunal to take a unified approach to the inevitable overlap in issues between claims. By way of example, of the collective proceedings that relate to the subject matter of the Interchange Fee Umbrella Proceedings, Merricks, although not part of the Umbrella Proceedings, is being jointly case managed alongside them: and the same could be expected of the other Interchange collectives, should they be certified next year. Quite how UPOs will be utilised, and their impact, will no doubt become clear in 2023.
If 2022 was a busy year, 2023 is set to be even more so. The Tribunal is likely to hear certification applications in several cases, including Dr Lovdahl Gormsen v Meta Platforms, Inc. and Others, Alex Neill Class Representative Limited v Sony Interactive Entertainment Europe Limited and Ors, Julie Hunter v Amazon.com, Inc. and Ors, and others. Alongside that, further claims will no doubt be filed. Whilst the focus of the claims brought to date has arguably been on Big Tech, further industry sectors will come under scrutiny, with, for example, BSV Claims Limited breaking new ground, being one of the first competition law claims to be brought relating to the digital asset space in the UK.
With many collective claims now progressing to trial it may be that parties start to turn their minds to utilising the – yet untested – collective settlement regime, a key advantage of which for defendants is the potential for the reversion of undistributed damages. The year ahead may therefore see a landmark first collective settlement. Time will tell.
 1437/7/7/22 Elisabetta Sciallis v Fender Musical Instruments Europe Limited and Another.
 Dr. Rachael Kent v Apple Inc. and Apple Distribution International Ltd  CAT 45 and Elizabeth Helen Coll v Alphabet Inc. and Others  CAT 39 (in which case, the defendants withdrew their opposition to certification shortly before the certification hearing was scheduled).
 Justin Le Patourel v BT Group PLC  EWCA Civ 593.
 London & South Eastern Railway Limited, First MTR South Western Trains Limited & Stagecoach South Western Trains Limited Appellants v Justin Gutmann  EWCA Civ 1077.
 See note 3 above.
 See note 4 above.
 Consumers' Association v Qualcomm Incorporated  CAT 20.
 Mark McLaren Class Representative Limited v MOL (Europe Africa) Ltd and Others  CAT 10.
 Mark McLaren Class Representative Limited v MOL (Europe Africa) Ltd and Others  CAT 53.
 Phillip Evans v Barclays Bank PLC and Others; Michael O’Higgins FX Class Representative Limited v Barclays Bank PLC and Others  CAT 16.
 Phillip Evans v Barclays Bank PLC and Others; Michael O’Higgins FX Class Representative Limited v Barclays Bank PLC and Others  CAT 42.
 UK Trucks Claim Limited v Stellantis N.V. (Formerly Fiat Chrysler Automobiles N.V.) and Others; Road Haulage Association Limited v Man SE and Others  CAT 25. Although we note that the UKTC has also sought to challenge the certification of the RHA in Trucks.
 UK Trucks Claim Limited v Stellantis N.V. (Formerly Fiat Chrysler Automobiles N.V.) and Others; Road Haulage Association Limited v Man SE and Others  CAT 48.
 Dr. Rachael Kent v Apple Inc. and Apple Distribution International Ltd  CAT 45.
 With a second ‘on the spot’ decision following shortly thereafter from a separate panel of the Tribunal in Elizabeth Helen Coll v Alphabet Inc. and Others  CAT 39.
 David Courtney Boyle v Govia Thameslink Railway Limited & Others  CAT 46.
 Practice Direction 2/2022, available online: https://www.catribunal.org.uk/sites/default/files/2022-06/Practice%20Direction_Umbrella%20Proceedings_06%20June%202022_0.pdf.
 1266/7/7/16 Walter Hugh Merricks CBE v Mastercard Incorporated and Others.
 1266/7/7/16 Walter Hugh Merricks CBE v Mastercard Incorporated and Others; and then the four proceedings brought simultaneously in 1443/7/7/22 Commercial and Interregional Card Claims I Limited v Visa Inc. & Others; 1444/7/7/22 Commercial and Interregional Card Claims II Limited) v Visa Inc. & Others; 1441/7/7/22 Commercial and Interregional Card Claims I Limited v Mastercard Incorporated & Others; 1442/7/7/22 Commercial and Interregional Card Claims II Limited v Mastercard Incorporated & Others. We note that the Merricks proceedings are stayed pending the outcome of the Interchange Fee Umbrella Proceedings evidential hearing in May 2023.
 1433/7/7/22 Dr Liza Lovdahl Gormsen v Meta Platforms, Inc. and Others.
 1527/7/7/22 Alex Neill Class Representative Limited v Sony Interactive Entertainment Europe Limited; Sony Interactive Entertainment Network Europe Limited; and Sony Interactive Entertainment UK Limited.
 Case 1568/7/7/22: Julie Hunter v Amazon.com, Inc. and others.
 1523/7/7/22 BSV Claims Limited v Bittylicious Limited & Others.