Bucking the trend of recent certification decisions, the Competition Appeal Tribunal refused to grant an opt-out collective proceedings order in favour of either of the two competing proposed class representatives in the foreign exchange follow-on claims. In a significant victory, the respondent banks succeeded in their argument that the claims brought by O’Higgins and Mr Evans should not proceed on an opt-out basis.
The Tribunal has given O’Higgins and Evans three months to decide whether to amend their applications to an opt-in basis, but the Tribunal’s comments on the weaknesses in the economic theory at the heart of their claims, combined with its concerns about the adequacy of their funding arrangements, will have major ramifications for what will happen next – not only for these claims, but for the collective action regime as a whole.
There is a lot to unpack in the judgment, but here are our key takeaways:
- The Tribunal could and did consider strike out of its own initiative. While both applications were suitable for strike out, the Tribunal chose not to do so only because competition cases arguing market wide harm are relatively novel. This contrasts with the Tribunal’s approach in Le Patourel and Boundary Fares, where strike out arguments got short shrift.
- The majority’s decision that opt-in was to be preferred was driven largely by the weakness of the claims in substance and form, that opt-in would be practicable in the circumstances of the case and because of the settlement pressures which arise in the opt-out scenario, potentially going against the interests of the class. The minority dissented on this point, both in principle and as a matter of discretion – the dissenting chairman would have granted an opt-out collective proceedings order.
- It was not necessary to decide carriage as between the competing applicants, but if it were to choose, the Tribunal preferred Mr Evans.
In this first refusal to grant an opt-out collective proceedings order, post-Merricks, the Tribunal has made clear that its certification assessment does have teeth. It is not merely the rubber stamping exercise some saw it as becoming; bad cases can expect to be closely scrutinised.
Baker McKenzie represents one of the defendant banks in these proceedings.
 Michael O’Higgins FX Class Representative Limited v Barclays Bank PLC and Others; Mr Phillip Evans v Barclays Bank PLC and Others  CAT 16
 Justin Le Patourel v BT Group PLC  CAT 30
 Justin Gutmann v First MTR South Western Trains Limited and Another; Justin Gutmann v London & South Eastern Railway Limited  CAT 31
 Mastercard Incorporated and others (Appellants) v Walter Hugh Merricks CBE (Respondent)  UKSC 51