The expansion of opt-out class actions in the UK continues with certification of claims aimed at recovering for alleged systemic abuses of dominance across the south east and west rail networks. The judgment reinforces that certification will be viewed as only a first step in class litigation in the UK – as opposed to the immediate precursor to settlement that it can signify in the US and Canada – and reinforces the likelihood that claimant firms will continue to test this as a route to recover in mass consumer harm cases.

On 19 October 2021, the Competition Appeal Tribunal (“CAT”) authorised the third and fourth opt-out collective claims to proceed under the UK’s competition law class action regime in the “Boundary Fares” cases.[1] The cases were brought against two train operators for an alleged abuse of dominance for failing to make boundary fares sufficiently available to London Travelcard holders, to enable them to extend their Travelcards beyond the relevant travel zone, rather than purchase an entirely new ticket for the totality of the journey. Essentially, the claims contend that Travelcard holders paid twice for tickets and that the train operators had a special responsibility to protect against this.

In the most detailed consideration of the collective proceedings rules since the seminal Supreme Court judgment in Merricks[2], the CAT dismissed the train operators’ arguments that the claims should be struck out or certification refused. In doing so, the CAT addressed criticisms that the claims were unsustainable as they amounted to consumer protection claims rather than competition law infringements. It held that it was reasonably arguable that failing to do more to make boundary fares available amounted to an abuse of dominance, recognising that the law on unfair trading conditions as an abuse of dominance is in a state of development. This may encourage further creative uses of competition law on abuse of dominance to challenge corporate practices, particularly where they affect consumers.

Of particular relevance to the other collective actions awaiting certification are the following points:

  • Following Merricks, the fact that there may be differences on loss at an individual level does not prevent certification provided that:
    • common issues are established – such as in this case, which relied upon a systemic practice affecting a wide class of individuals – as opposed to cases where it was impossible to determine whether any class member had suffered loss at all without a detailed and complex inquiry; and
    • there is a realistic and plausible method of estimating aggregate damages. Further, following Sainsbury’s[3] in the Supreme Court, the CAT noted that damages can be estimated in a competition case – applying the “broad axe” approach to quantification.
  • The fact that take-up by the opt-out class at distribution may be low, and the fact that the CAT’s cost benefit analysis comes out slightly against the granting of a collective proceedings order (“CPO”), will not necessarily prevent the CAT from deciding that a claim is suitable for collective proceedings.  That was the case in Boundary Fares, but the overall balance of factors led the CAT to come down in favour of granting the CPO.
  • Cost benefit analysis may consider whether collective proceedings would be likely to benefit principally the lawyers and funder as opposed to the members of the class.
  • The CAT may consider whether an application properly should have been made on an opt-in basis, even where not argued for, albeit opt-in was not considered practicable in this case.
  • Where changes are needed to an administration and distribution plan to comply with the current state of the law, that will not prevent certification and the CAT paid short shrift to arguments regarding the plan – noting that these could easily be corrected down the line.

Overall, the judgment further demonstrates a low bar to certification of applications – indicating perhaps closer ongoing management of CPOs once granted and a greater prospect of contested trials of class claims. Indeed, Boundary Fares itself was not a rubber stamping exercise, with the CAT disallowing an element of the class definition where economic evidence was not submitted to support that element of the claims and requiring further submissions before taking a view on whether further amendments to the class definition will be necessary. The judgment follows CPOs granted in relation to interchange fees and BT landlines in August and September respectively. This latest from the CAT provides a clear indication that collective actions will not be rejected at the certification stage lightly.


[1] [2021] CAT 31

[2] [2020] UKSC 51; cp. Francesca Richmond and Jennifer Reeves, First opt-out class action approved by UK Tribunal in Merricks judgment, Global Litigation News

[3] [2020] UKSC 24

Author

Francesca Richmond is a partner in the Baker McKenzie Dispute Resolution team based in London. Francesca specializes in the litigation and investigation of high value commercial, antitrust and regulatory enforcement matters. She is noted for her expertise in ethics, governance and human rights in addition to litigation of antitrust, consumer and data privacy law.

Author

Jennifer is a Senior Associate in the Baker McKenzie Dispute Resolution team based in London. She is also a member of the firm's EU, Competition & Trade team. Jennifer advises clients in relation to general commercial disputes, competition claims, competition appeals and judicial review challenges. She is a member of the firm's Competition Litigation, Public Law and Business Crime Units.