A class apart: 2021 – a milestone year for opt-out collective actions
After five years of faltering and relatively slow progress, 2021 was the year that the UK’s opt-out collective proceedings regime finally took off. Whilst not a single claim was certified in the five years following the inception of the regime in 2015, 2021 finally saw four opt-out claims certified with judgments also awaited on certification this year in Trucks, FX and Ro-Ro. There was also an additional seven opt-out claims filed.
We explore each of these developments further below and take a closer look at some of the themes that draw the various cases together. Looking beyond 2021 and to the horizon, just a few days into 2022, it’s clear that whilst the UK’s opt-out regime may have had a difficult start, its later years look to be full of promise.
You wait nearly six years for a claim to be certified and then…
Well, three certification decisions come along at once.
Second time lucky
Following the Supreme Court’s landmark judgment in December 2020, Mr Merricks’ claim was the first collective claim to be certified. The CAT’s certification judgment, handed down on 18 August 2021 came almost five years after Mr Merricks first filed his application to bring a collective claim against Mastercard on behalf of around 46.2 million UK consumers for losses stemming from Mastercard’s imposition of multi-lateral interchange fees in breach of competition law.
Following the Supreme Court’s ringing endorsement of the principles underlying the introduction of the opt-out regime and its refusal to grant Mastercard’s appeal to reject Mr Merricks’ claim, Mastercard chose not to oppose certification save on two discrete issues, claiming that Mr Merricks ought not to be given permission to include deceased consumers within his class and that class members’ claims should not include compound interest. The CAT agreed with Mastercard on both points, holding that it was too late to amend the claim to include personal representatives within the class and that it was difficult to see how a claim for compound interest could raise a common issue across the class. Subsequently, it granted a CPO subject to those two exclusions and the provision by Mr Merricks’ funder of an undertaking to Mastercard in relation to adverse costs.
Time to phone a friend
The CAT’s August 2021 judgment in Merricks constituted a major milestone for the collective redress regime and was followed, just over a month later, by a second certification judgment in Le Patourel v BT, a standalone claim on behalf of approximately 2.3 million BT landline customers alleging abuse of dominance on the part of BT in the form of excessive pricing.
Two aspects of the way the CAT dealt with this claim are particularly noteworthy. First, speed: this claim progressed significantly more swiftly than Merricks – with only 9 months from filing to a certification judgment. This is a positive indicator for claimants: in short, post-Merricks, the CAT doesn’t intend the certification stage to become a drawn-out process. Second, whilst BT had attempted to strike out Mr Le Patourel’s claim alongside the certification hearing, the CAT dismissed BT’s application and, in doing so, made clear the high bar that defendants will need to meet to successfully strike out a claim at this early juncture absent any truly knockout blow.
Granting a CPO, the CAT also rejected BT’s assertion that the claim ought to be brought on an opt-in as opposed to an opt-out basis and refused BT permission to appeal. Permission was, however, subsequently granted by the Court of Appeal in November 2021, the upshot of which is likely to be the period of delay which Mr Le Patourel had initially avoided. Hopefully for the class members involved this will not be the start of another lengthy hiatus all the way to the Supreme Court.
The third certification judgment of 2021 was granted in two related claims brought against rail franchises on 19 October 2021 (the Trains claims). Both claims relate to the availability of “boundary fares” which allow Travelcard owners to travel beyond the zones covered by their Travelcard without paying twice. Mr Gutmann, the class representative, alleges that the defendant train companies did not make boundary fares sufficiently available for Travelcard holders to purchase, thereby abusing their dominant market position.
As in the Le Patourel claim, Mr Gutmann faced a strike-out application, but the CAT dismissed the application and certified both cases, allowing the two claims to proceed to trial. The CAT’s judgment addresses how the causation and an assessment of issues common to the class members ought to be dealt with in the context of the certification test, both of which are highly likely to arise in consumer claims. In addressing causation, the CAT held that if there is a realistic and plausible method of estimating aggregate damages, that should be sufficient to overcome any issues as to individual aspects of causation. In relation to the assessment of common issues, the CAT recognised that certain matters may not arise equally in the claims of all class members but concluded that the issues were sufficiently similar or related so as to constitute common issues. This is consistent with the approach adopted in Merricks where pass-on was accepted as a common issue notwithstanding potential variation of merchant pass-on between different sectors.
Akin to the position in the Le Patourel claim, the CAT refused permission to appeal its judgment and the defendants have now sought permission to appeal directly from the Court of Appeal.
2021 also saw CPO hearings in the Trucks and FX proceedings (in April and July respectively), albeit judgments in relation to both are still awaited this year. There are a number of similarities as between both sets of proceedings. Both sets of cases “follow-on” from European Commission decisions (as opposed to being brought on a standalone basis) but have the added complication in each case of having claims vying against the other for certification.
In Trucks, the Road Haulage Association (RHA) has applied to bring a claim on an opt-in basis and already has a number of claimants signed up to be part of its class. Meanwhile, the special purpose vehicle UK Trucks Claim Limited (UKTC) (a company incorporated for the purposes of bringing the claim) has applied to bring an opt-out or, alternatively, an opt-in claim on behalf of a similar class of claimants (the latter pleaded in the alternative). The CAT had previously considered issues raised relating to the authorisation of the representatives in both claims and their respective funding arrangements but had otherwise postponed the CPO hearing pending the Supreme Court’s judgment in Merricks. In the April certification hearing, the CAT made clear that it intended to certify only one of the RHA’s and UKTC’s claims, not both, assuming otherwise successful.
In FX, two overlapping applications – issued by Mr Evans and Michael O’Higgins Class Representative Limited – are competing to pursue opt-out claims. Although so-called carriage disputes are common in other jurisdictions with more developed collective action regimes (such as the US and Canada), this was the first time the CAT had grappled with two competing opt-out claims. With only limited guidance in the CAT Rules and Guide on the approach to determining carriage disputes, the judgments in FX and Trucks will be an important development of the law in this area.
Another similarity is that both sets of claims seek to represent classes that are predominantly made up of businesses rather than consumers. The defendants in both cases have argued that if the claims are to be certified at all, they should be opt-in rather than opt-out claims (i.e. would-be class members should take positive steps to join the class). Although the CAT has rejected the notion of opt-in claims for consumers in Le Patourel, FX and Trucks will be the first time it gives its views on whether such claims are practicable for businesses.
Should either of the Trucks and/or FX claims be certified, it will be interesting to chart their progress alongside the parallel claims brought by individual businesses arising from both cartels (Trucks in the CAT and FX currently in the High Court, although due to transfer to the CAT), not least because the individual claims are currently further ahead than their collective counterparts due to the delays in certification.
A CPO hearing also took place late in 2021 in the opt-out collective action brought on a follow-on basis by proposed class representative Mark McLaren against the addressees of the 2018 European Commission Decision in Case AT.40009 – Maritime Car Carriers (so-called “roll-on/roll-off” or “ro-ro” ships).
Mr McLaren seeks to represent both consumers and businesses affected by the shippers’ anticompetitive conduct, which he argues raised the prices of cars to the class members’ detriment. In common with the defendants in FX, Trucks and Le Patourel, the defendant shippers in Mr McLaren’s claim argued that the proposed class representative’s claim would be better framed as an opt-in claim, although this argument was advanced in relation to the corporate class members only. Mr McLaren opposed the suggestion that he should bifurcate his class. Alongside the similar points raised in Trucks and FX, it will be interesting to see how the CAT deals with this issue in its certification judgment in due course.
Alongside the above CPO hearing and judgments, 2021 saw an uptick in the number of opt-out collective claims filed with the CAT:
- In February 2021, Which? filed an application for a standalone opt-out claim on behalf of over 29 million UK consumers of smartphones against the US tech giant Qualcomm, Inc. Which?’s claim is for over £485 million and relates to Qualcomm’s alleged abuses of its dominant positions in the markets for chipsets and for its standard essential patents. Qualcomm initially sought to challenge jurisdiction but subsequently withdrew its challenge and the application will now proceed to the certification hearing.
- A further claim against a tech giant, Apple, was filed in May, again on a standalone basis and again based upon alleged abuses of dominance. Dr Rachel Kent proposes to represent a class of consumers affected by Apple’s practices in relation to its App Store.
- In June a further standalone, opt-out collective action based on abuse of dominance was filed against Govia Thameslink on behalf of passengers travelling on the London to Brighton mainline.
- The following month saw another application for a standalone, opt-out collective action against Google, based on abuse of dominance stemming from its practices in relation to the Play Store.
- November brought with it a claim by Home Insurance Consumer Action Limited (HICAL) (led by Director Kate Wellington) against the companies behind comparethemarket.com on behalf of around 30 million UK consumers of home insurance. HICAL’s claim is based upon the CMA’s finding that comparethemarket.com infringed competition law by imposing so-called “wide most-favoured nation” clauses in its contracts with insurers. The defendants are appealing the CMA’s decision and a ruling in the appeal is expected in the first half of 2022.
- 2021’s final claim was filed by the class representative in the Trains claims against Govia Thameslink and relates to the same alleged conduct as Mr Gutmann’s claims already on foot against South Eastern and South Western Trains.
There are several trends to observe based on the above claims. The first is the predominance of claims brought on behalf of consumers. The second is the focus upon standalone, as opposed to follow-on claims: six of the seven claims filed in 2021 were brought on the former basis. A further theme is the focus of claimants’ firepower on technology: this perhaps ought not to be surprising given the concentrations of power in the digital economy and the importance of technology to consumers’ everyday lives, both of which are only likely to increase.
The future is bright
If 2021 was a busy year for opt-out collective redress, then 2022 looks to be busier still. As well as the CPO judgments expected in Trucks, FX and Ro-Ro and the potential for further appeal hearings, the CAT’s diary will soon be packed with certification hearings in some of the further claims filed in 2021, including Qualcomm and Apple due to be heard in spring 2022. As to the further claims that may be filed in 2022, we can only wait and see, albeit it appears likely – based on the claims filed in 2021 – that standalone claims against technology companies may dominate.
Whilst the progress of Mr Merricks’ claim to the Supreme Court has provided vital guidance as to the test to be applied at certification, it has no doubt increased defendants’ propensity to seek to argue the merits of claims at the certification stage via other means – principally via the making of strike-out applications and arguments going to the suitability of claims for opt-in as opposed to opt-out proceedings. The forthcoming judgments in Trucks, FX and Ro-Ro are likely to offer further clarity on the opt-out/opt-in test, albeit given the nature of the issues at stake, it might be prudent to assume (as in the Le Patourel claim) that CPO judgments may be followed by appeals. While the Supreme Court provided some of the answers in Merricks, it is clear from the recent granting of permission by the Court of Appeal in Le Patourel that there are likely to be a good number of further points tested further in the years to come.
As further cases are brought and the boundaries of the regime are tested, it will be important that rules and procedure adapt to promote efficiencies and present a fair position for current and future claimants. It may also be appropriate to examine the costs for both sides in reaching certification. As it stands currently, there may be considered to be an imbalance between the costs expended by both claimants and defendants in (respectively) applying for and defending certification, relative to the test which it has been held claimants need to meet.
However, what our review of 2021 has revealed is a picture of a regime which has sprung into life following a period of enforced hibernation. It’s clear from an analysis of the cases being brought that opt-out collective redress is playing an increasingly important role in seeking to provide not only access to justice for those whose claims would otherwise not be brought but also in the context of standalone claims supplementing the role of public enforcement in promoting consumer welfare and deterring anticompetitive conduct. Long may that continue.
 1289/7/7/18 Road Haulage Association Limited v Man SE and Others; 1282/7/7/18 UK Trucks Claim Limited v Stellantis N.V. (formerly Fiat Chrysler Automobiles N.V.) and Others.
 1336/7/7/19 Phillip Evans v Barclays Bank PLC and Others; 1329/7/7/19 Michael O’Higgins FX Class Representative Limited v Barclays Bank PLC and Others.
 1339/7/7/20 Mark McLaren Class Representative Limited v MOL (Europe Africa) Ltd and Others.
 The CAT has to date issued three certification decisions, albeit the third of these relates to two claims, both brought on a standalone basis by class representative Justin Gutmann in relation to the same conduct by different train-operating companies.
 Mastercard Incorporated and others (Appellants) v Walter Hugh Merricks CBE (Respondent)  UKSC 51.
 Walter Hugh Merricks CBE v Mastercard Incorporated and Others  CAT 28.
 Justin Le Patourel v BT Group PLC and Another  CAT 30.
 1304/7/7/19 Justin Gutmann v First MTR South Western Trains Limited and Another; 1305/7/7/19 Justin Gutmann v London & South Eastern Railway Limited.
  CAT 31.
 1382/7/7/21 Consumers' Association v Qualcomm Incorporated.
 1403/7/7/21 Dr. Rachael Kent v Apple Inc. and Apple Distribution International Ltd.
 1404/7/7/21 David Courtney Boyle & Edward John Vermeer v Govia Thameslink Railway Limited & Others.
 1408/7/7/21 Elizabeth Helen Coll v Alphabet Inc. and Others.
 1423/7/7/21 Home Insurance Consumer Action Limited v BGL (Holdings) Limited & Others.
 1425/7/7/21 Justin Gutmann v Govia Thameslink Railway Limited & Others.