BT Group Plc v Justin Le Patourel

JurisdictionEngland & Wales
JudgeLord Justice Green
Judgment Date06 May 2022
Neutral Citation[2022] EWCA Civ 593
Docket NumberCase No: CA-2021-000748 (formerly C3/2021/1632)
CourtCourt of Appeal (Civil Division)
BT Group Plc
British Telecommunications Plc
Justin Le Patourel

[2022] EWCA Civ 593


Sir Julian Flaux

Chancellor of the High Court

Lord Justice Green


Lord Justice Phillips

Case No: CA-2021-000748 (formerly C3/2021/1632)




[2021] CAT 30

Royal Courts of Justice

Strand, London, WC2A 2LL

Sarah Ford QC, Sarah Love & Allan Cerim (instructed by Simmons & Simmons LLP) for the Appellants

Ronit Kreisberger QC, Nikolaus Grubeck & Jack Williams (instructed by Mishcon De Reya) for the Respondent

Hearing date: Tuesday 15th March 2022

Approved Judgment

Lord Justice Green delivering the single judgment of the Court:

A. Introduction

The Collective Proceedings Order


There is before the Court an appeal against the Collective Proceedings Order (“ CPO”) made by the Competition Appeal Tribunal (“ the Tribunal” or “ the CAT”) which certified a claim for damages (“ the Claim”) against the Defendants, BT Group PLC and British Telecommunications PLC (together “ BT”), as eligible for collective (class) proceedings. The reasons for the making of the CPO are set out in a judgment of the Tribunal dated 27 th September 2021 (“ the Judgment”). The CPO was made pursuant to the powers of the CAT under section 47C Competition Act 1998 (“ CA 1998”). The Tribunal also ordered that the remedy, assuming the Claim succeeded, would be an award of “ aggregate damages”.

Opt-in or opt-out?


The Tribunal in addition ordered that the Claim proceed upon an opt-out basis. An opt-out claim is brought on behalf of all of the members of a defined class except those that choose to opt-out. The effect of the CPO is that a very large number of persons, estimated to be circa 2.3 million, will, should the Claim prevail, be entitled to recover compensation, without having to have incurred the effort, cost and risk of joining the proceedings as claimants from the outset, or even necessarily having been aware of the litigation at all.


BT argued before the CAT that if it were minded to certify the Claim then it should be upon an opt-in basis, i.e. any person wishing to benefit from the claim would be required, quite deliberately, to join the claim at the outset.


The Claim alleges that BT abused its dominant position in the market for voice only telephony by charging customers supra-competitive prices which it says are “ unfair” and excessive contrary to section 18 CA 1998 which prohibits the abuse of a dominant position. The Claim refers by way of support to provisional findings made by Ofcom that BT had misused its market power in order to impose prices which were materially above the competitive level on voice only telephony customers. On 26 th October 2017 Ofcom issued a statement entitled “ Review of the market for standalone landline telephone services” (“ the Statement”) which concluded that BT possessed “significant market power” (“ SMP”) in the market for voice only telephony services and that it had charged customers materially above the competitive level. These findings were made pursuant to the Communications Act 2003 under its ex ante regime for regulation. This empowers the regulator to determine that an undertaking has SMP and then impose a forward-looking regulatory regime to forestall the possibility that in the future the undertaking misuses its SMP to the detriment of consumers. The fact that the regime is ex ante does not, of course, preclude the regulator intervening where there is evidence of existing, on-going, misuse of market power. It can intervene after the event to bring the harm to an end and then introduce regulation to prevent repetition. This sort of regime differs from the ex post regime under the CA 1998 which applies to proscribe and punish past conduct but where there is no significant power to introduce forward looking, prophylactic, regulation.


Nonetheless, there are, as the CAT found in its Judgment, significant similarities and overlaps between the two types of regime such that even a provisional report of Ofcom on misuse of SMP could amount to fertile territory for a claim based upon abuse of dominance under section 18 CA 1998. For example, the test for SMP, under section 78 Communications Act 2003, is the same as the test for dominance under section 18 CA 1998. We set out more detail about the Ofcom findings in Section B below.


This appeal does not concern the conclusion of the CAT that the Claim should be certified as eligible for a collective action; nor does it concern the conclusion, in response to the applications by BT to strike out the Claim and/or seek reverse summary judgment, that the Claim had a real prospect of success; and nor does it concern the ruling that there be an award of aggregate damages in the event that the Claim succeeded.


The appeal focuses upon the reasoning in the Judgment that the proceedings should be opt-out and not opt-in. The arguments advanced fall under three broad headings. First, the criteria that the CAT should apply in selecting as between opt-in or opt-out proceedings (Issue I). Secondly, the powers available to the CAT, once it has ordered that damages be paid, to direct that those damages are to be distributed by way of an account credit (Issue II). Thirdly, the role that an assessment of the merits plays in the choice of opt-in or opt-out proceeding (Issue III).

The scope of appeals: points of law only


The appeal is brought under section 49(1)(a) CA 1998 “… on a point of law arising from a decision of the Tribunal in … collective proceedings … as to the award of damages or other sum …”. The jurisdiction enables this court to supervise all issues relating to damages which arise at whatever stage of the proceedings (including therefore at the certification stage) but it is limited to points of law only. We address the implications of this jurisdiction in greater detail at paragraphs [50] – [57] below.

Merricks and Lloyd


The nature and effect of the legislation has been considered in two judgments of the Supreme Court: Mastercard v Merricks [2020] UKSC 51 (“ Merricks”) and Lloyd v Google Inc [2021] UKSC 50 (“ Lloyd”). Both were explored before us in written and oral submissions. Merricks concerned the process of certification, not the choice of opt-out or opt-in. Nonetheless, it provides guidance on the purpose of the legislation and the nature and scope of the discretion conferred upon the Tribunal to make decisions in relation to collective proceedings. We treat it as binding on issues where there is overlap and otherwise highly persuasive. Lloyd concerned the scope of the power under CPR.19.6 to approve representative actions. In the course of judgment, the Court expressed views about different types of collective proceedings, including the regime under the CA 1998. It sets out an analysis of the relative benefits of different types of opt-in and opt-out proceedings other than representative actions under CPR 19.6. It was submitted by the appellants that this analysis was obiter. It is at least arguable that the Court considered alternative forms of collective proceedings as part of its review of the legislative landscape and as a guide to construction of the CPR: see e.g. Judgment paragraphs [23], [33] and [68]. It is however ultimately unnecessary for us to decide this point. We treat the judgment as, at the least, strongly persuasive because it was a unanimous judgment of the Court and, in any event, we agree with the analysis that it sets out.

B. The Ofcom findings


The Claim, as already explained, is brought in the light of Ofcom's finding that BT held SMP and had charged various categories of customer above the competitive level. The CAT sets out the history of the regulatory proceedings in its Judgment at paragraphs [10] – [17].


The background can be briefly summarised. In 2009 Ofcom removed all regulation on BT in the retail telephony market. Thereafter, many consumers moved to acquire bundled telephony and other services. Ofcom initiated a strategic review of the market in 2016. According to Ofcom, 88% of households had by 2017 acquired their communication services in a bundle of either dual-pay packages (landline and broadband) or triple-pay packages (landline, broadband and pay-tv). Ofcom concluded that competition for packages had steadily increased over time. Ofcom however expressed concern that, in contrast, standalone landline customers had experienced real time price increases and were not benefiting from competition.


In a consultation paper of 28 th February 2017 Ofcom set out proposals to address its concerns. It identified two categories of consumer who purchased standalone telephone services: (i) voice only customers (“ VO customers”) who only acquired a telephone service and not broadband; and (ii) split purchase customers (“ SP customers”) who acquired a telephone service and a broadband service, but not as a bundle. Ofcom concluded that because telephone providers could not distinguish between VO and SP customers it was appropriate to include them in a single product market for the purpose of determining SMP. Ofcom provisionally concluded that BT had SMP in the provision of services to customers who purchased landline telephone services on a standalone basis.


By way of remedy Ofcom proposed to regulate BT's standalone telephony services through a retail price control, with an initial price cut of between £5 and £7 in monthly line rental, and a basket cap on prices of line rental and calls to limit future price increases to no more than the rate of inflation. Ofcom also proposed to require BT to work with it to trial the provision of consumer information to encourage standalone telephony customers to seek better value deals elsewhere in order...

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