BT successfully fights off £1.3bn ‘overcharging’ class action
Telecoms giant BT has successfully defended a £1.3bn class action over allegations it “disproportionately overcharged” its landline customers.
The Competition Appeal Tribunal (CAT) revealed today that the class action claim against BT failed after deeming that “overall” prices it charged “were not unfair, and therefore there was no abuse of dominant position”.
The case was launched by law firm Mishcon de Reya on behalf of over three million customers with consumer champion Justin Le Patourel lending his name as the claimants representative.
The claim alleged that BT charged excessive prices regarding “standalone” fixed voice services, notably for older customers, and that this constituted an abuse of a dominant position, however, the Tribunal disagreed.
The proceedings were certified in October 2021 but BT appealed. The case was the first of its kind, dealing specifically with the CAT’s approach to certifying collective proceedings as opt-out rather than opt in.
Despite that, the Court of Appeal dismissed BT’s appeal against the certification, and the parties went to trial in January, which ended in late March.
While an important case for the parties involved, it is also very significant for the legal sector as it is the first case to progress to trial since the collective proceedings regime was introduced in 2015.
The claimants had Mishcon de Reya partner Sarah Houghton and managing associate Gwen Ballin-Reeler. While BT had Simmons & Simmons partners Patrick Boylan and Satyen Dhana on for its defence.
A spokesperson for BT said: Today the CAT handed down its judgment in the case of Justin Le Patourel v BT Group in which the CAT has fully dismissed the claim and found that BT Group’s conduct did not breach competition law. We take our responsibilities to all of our customers very seriously and welcome today’s ruling.”
While Le Patourel said: “While I am pleased that the Tribunal has recognised BT’s dominant position in the market, and the significant and persistent nature of its excessive pricing, I am disappointed that it did not agree that these prices were unfair.”
“This means we cannot now compensate many of BT’s most loyal but mistreated landline customers for the overcharging that took place. However, we are carefully considering the Tribunal’s decision and whether the next step will be an appeal to the Court of Appeal to challenge this verdict,” he added.
Commenting on the decision, Mohsin Patel, co-founder of Factor Risk Management stated: “Given the CAT’s finding that BT’s prices exceeded the benchmark significantly and persistently, this will be a bitter pill for the class representative, his lawyers and backers to swallow.”
He added that “inevitably, they will be considering the judgment carefully and considering potential grounds for appeal. Therefore, there may still be some light at the end of the tunnel.”
While Tim West, partner at Ashurst added that “the judgment was eagerly anticipated and will no doubt be disappointing news for the claimants.”
“While an appeal is likely (especially on the question of unfairness of BT’s excessive pricing), it is unlikely that this will spell the end of the collective action regime,” he added.