Competition law: All together now

The Consumer Rights Act 2015 introduced a new opt-out collective action regime for competition cases. It allowed claims to be brought on behalf of a group without identifying its members. And it included provisions to reform and expand the Competition Appeal Tribunal (CAT) as the specialist forum for opt-out collective proceedings, with its own certification process to filter out unmeritorious claims. 

At the time, there were hopes that class actions in competition law cases would transform consumer rights and redress in the UK. 

Ten years on, the number of claims is falling sharply. A report by Stephenson Harwood in October 2025 found: ‘Collective action filings reduced from 17 in 2023 to just three in the first nine months of 2025. While the CAT is busy administering claims issued in the past five years or so, the regime is experiencing a dramatic decline in new claim activity that should concern anyone who values competitive markets and consumer protection.’ 

'New claims filed at the CAT have fallen sharply from their 2023 peak – a widely recognised consequence of weaker funder appetite following the Supreme Court’s PACCAR decision'

Suzanne Labi, Winston & Strawn

The decline is partly due to controversy over the amount of damages taken by litigation funders and legal fees. In 2023, the Supreme Court ruled in PACCAR that third-party litigation funding agreements based on a percentage of the damages awarded constituted damages-based agreements, which made them unenforceable in opt-out collective proceedings. This in turn made it more challenging for class representatives to raise funds to pursue collective claims on behalf of claimants with relatively small individual losses. 

As Suzanne Labi, partner in the litigation practice at Winston & Strawn, explains, access to litigation funding is an important element in the collective claims equation: ‘New claims filed at the CAT have fallen sharply from their 2023 peak – a widely recognised consequence of weaker funder appetite following the Supreme Court’s PACCAR decision on the enforceability of certain funding models. However, confidence in the market is recovering. The UK government is set to reverse that judgment through legislation and introduce light-touch regulation of the funding industry. Should that reversal occur as anticipated, we would expect 2026 to mark a turning point for consumer rights litigation and collective redress in this jurisdiction.’

Last August, the Department for Business and Trade launched a call for evidence on the opt-out collective actions regime, with 31 questions covering scope, funding, certification, distribution and alternatives to litigation. It received responses from law firms, bar associations, consumer bodies, class representatives, litigation funders, thinktanks and lobby groups. The government’s formal response is awaited, although there are indications that there will be further consultation on specific proposals for reform. 

In December, the Ministry of Justice confirmed its intention to act on the recommendation of the Civil Justice Council (CJC) review into litigation funding and reverse the PACCAR judgment. 

This and recent landmark decisions – notably the claimant victory in Kent v Apple, also in December – indicate the possibility of a resurgence of competition law cases being brought to the CAT. And there are proposals to tweak the current regime. Indeed, in its final report, the CJC recommended new light-touch regulation to govern third-party litigation funding arrangements. The MoJ subsequently confirmed its intention to put in place a new framework to ensure that agreements are fair and transparent.

Certification standards

'When the Supreme Court lowered the standard for certification, the claims piled in'

Andrew Leitch, Hogan Lovells 

Another factor affecting claims volume has been the variation in the CAT’s certification standard. Andrew Leitch, competition partner at Hogan Lovells, recalls that the first case brought before the CAT under the opt-out regime, which involved mobility scooters [Dorothy Gibson v Pride Mobility Products Ltd], failed to achieve certification. 

The second case, Merricks v Mastercard, which related to the interchange fees on cross-border transactions, settled in May 2025 after nearly nine years of litigation. Initially, the CAT had refused certification, but this was overturned by the Court of Appeal and subsequently by the Supreme Court.  

Leitch says: ‘When the Supreme Court lowered the standard for certification, the claims piled in. The consequence was that [some] cases that passed certification, like Le Patourel v BT Group [£1.1bn claim], subsequently failed in court, with significant losses for funders and insurers as well as claimants. Then the pendulum swung the other way and certification was taken seriously again. In Christine Riefa Class Representative Ltd v Apple Inc and Amazon Inc, Professor Riefa was cross-examined at the certification hearing and found not to be a suitable class representative [in this case]. The case was dismissed.’ 

Leitch observes that this more rigorous approach to certification can be attributed to the appointment of Mrs Justice Kelyn Bacon as a chair of the CAT in 2020 and its president in May 2025. 

Increasingly, claimant and defendant firms are engaging consultant economists, because the legal test for a competition claim is to establish its economic effects. Mark Bosley, managing director at economic consultancy BRG, and director Felix Hammeke work in this area. They are regularly brought in to establish the viability of a claim by demonstrating infringement at the certification stage and at later stages of the process, to quantify damages. As Bosley explains, while they are employed by the parties, their overriding duty is to the court. 

Scope creep

Another factor shaping the market is claims brought to the CAT to take advantage of the opt-out regime, which is only available for competition law claims, which should have been covered by different areas of law. 

Leitch explains that Gormsen v Meta (about the collection of Facebook users’ data), which received certification, was essentially a data protection case. The Justin Gutmann v First MTR South Western Trains Ltd and Another boundary fares claim was a consumer protection case, rather than an infringement of competition law. 

Laura Whyatt, a competition partner at Dentons, represented the defendant in the second of the boundary fares claims, which settled for £25m. She agrees with Leitch on the damaging effect of diverse cases being reframed as competition law. ‘There is a tension in the current regime being limited to competition law infringements and other conduct therefore needing to be reframed as competition law infringements in order for claimants to take advantage of the opt-out collective regime,’ Whyatt says. ‘The opt-out competition collective actions regime allows for aggregate damages without proving individual loss, and so claimants are incentivised to frame disputes as competition claims, even where the underlying issues more naturally belong in areas such as consumer, data protection, or environmental law.’

Fewer cases and even fewer decisions

After 10 years of the opt-out collective actions regime, with more than half the number of cases filed achieving certification, only three cases have gone to full trial. Two were dismissed (Le Patourel v BT Group and Gutmann v Train Operators, where one defendant settled before trial), and one succeeded (Kent v Apple was the first collective action to win at trial, with £1.5bn awarded). Other certified cases settled, which means that there is limited legal precedent. There is also what some consider to be a disappointing track record in delivering redress, as settlements do not guarantee that consumers receive meaningful compensation. 

'It is only now that we are beginning to see the first substantive judgments and the first meaningful settlements emerging from the system'

Laura Whyatt, Dentons

Leitch believes the issue should not be about the volume of cases, but about ensuring that the right cases receive certification. ‘For companies exposed to these claims, there is a huge pressure to settle rather than bet the company, whether or not they think the case has merit,’ he says. ‘When the regime was coming into force, there was a big debate about whether introducing US-style class actions would open up the opportunity for vexatious litigation. And we were assured at the time that the CAT would play a gatekeeper role and make sure that only meritorious cases got through the certification stage. When the Supreme Court lowered the standard for certification, there were a lot more cases, but now that is being corrected and we are seeing fewer, better cases.’ 

Whyatt attributes the fluctuation in the volume and types of claim being brought before the CAT to the maturing regime: ‘It is only now that we are beginning to see the first substantive judgments and the first meaningful settlements emerging from the system. That timeline is not wholly surprising. The early appeals regarding certification needed to run their course before the regime was sufficiently settled to attract claims… The procedural framework is being clarified by the courts, and parties are gaining experience in how these cases are run and resolved. This maturation is to be expected of a complex and ambitious litigation system.’

Anthony Maton, global co-chair and co-founder of Hausfeld, which acted for the winning claimant side in Kent v Apple, agrees: ‘While it sounds odd to say that it is a maturing market when the legislation has been on the statute book for 10 years, the lead case, Merricks v Mastercard, took a long time to get the Supreme Court judgment [that allowed it to go ahead] and in the meantime all the other cases were stayed.’ 

He adds: ‘So the regime has actually only been operating for five years. It’s the first time we have had a regime like that in the UK, and there were a huge number of questions about how it was going to operate. In that time, we’ve had different chairs of the tribunal, each with different priorities and approaches. So it’s only now that the regime is finding its feet. I think that is also why some of the early cases failed, like Le Patourel v BT Group, and the boundary fares cases, where one settled and two went to trial and didn’t succeed.’

Maturing market

'It wasn’t until the Supreme Court decision in Merricks set the standard for certification that we saw additional claims'

Natasha Pearman, Milberg London

Notwithstanding the decline in new cases being brought to the CAT, 2025 saw significant progress. Maton is optimistic: ‘We were involved with Kent v Apple, which was successful for a very large consumer class, and I think we will see more of those types of successful cases. We are also seeing more settlements. I see the regime starting to settle down and working better for claimants, and also for funders and lawyers.’ 

Natasha Pearman, head of competition litigation at Milberg London, is leading on the high-profile collective actions Alex Neill v Sony (a £5bn claim against Sony PlayStation) and Vicki Shotbolt v Steam (a £656m claim against Valve). She previously represented the claimants in Le Patourel v BT Group. 

Pearman supports Maton’s view that although the collective action regime took several years to get going, there has been significant progress in the past 12 months. ‘It wasn’t until the Supreme Court decision in Merricks set the standard for certification that we saw additional claims,’ she says. 

She adds that while the Merricks settlement was not considered successful because of the costs that were incurred (the funder will receive £68m of the £200m settlement fund), it had ramifications for subsequent cases – not least the decision on 18 February on merchant interchange fees – that will be beneficial for merchants involved in those cases. 

‘We are seeing positive outcomes for consumers and businesses that have been harmed, which is exactly what the regime was intended to do,’ Pearman says. ‘We’ve seen settlement in relation to various cartel damages cases and a positive judgment in Kent v Apple that will lead to a multi-billion-pound distribution to consumers, and if it doesn’t all go to consumers, it will support the Access to Justice Foundation.’ 

Funders and fees

Notwithstanding the controversy over the distribution of settlement funds, there are clear arguments for ensuring that funders and lawyers are rewarded for the risk involved in running collective claims. 

Maton explains: ‘The budgets in these cases are typically between £20m and £25m, so while [funders] will only invest in cases that they think will succeed, inevitably some cases won’t succeed and they will lose money. So it’s right that when cases do succeed, they should get a sensible return on what they’ve invested. And the CAT has been actively scrutinising funding arrangements, both on certification and on settlements.’ 

Maton makes a similar argument for lawyers: ‘Typically, lawyers act on these cases on a conditional funding agreement basis. Occasionally, someone might be fully paid, but generally lawyers aren’t making much money on actually running the cases, and again, the CAT has jurisdiction to look at the lawyers’ fees before paying them out. While there’s quite a noise about funders and lawyers, that’s rather unfair when you look at the risk that goes into these cases.’ 

He adds: ‘When the regime was originally set up, it was explicitly recognised that funders were part of the regime, otherwise claimants wouldn’t be able to bring these actions at all. For example, Bates & Others v Post Office Ltd is sometimes criticised because funders took quite a significant amount of the return, but if there hadn’t been a funder, there would have been no return because they wouldn’t have been able to bring the case.’

Turning a corner?

There are further indications that the regime is reviving. ‘The more positive outcomes we get, the greater the likelihood of increased settlement, which will balance the burden on the tribunal,’ says Pearman. Furthermore, the Kent decision helped reignite interest from funders, in contrast to the high-profile disputes between funders and class representatives, which present additional risk beyond the litigation risk. 

‘People are still getting claims funded,’ she says. ‘Milberg has just secured funding for the Apple Pay case, and we have other cases in the pipeline too. There are a few firms in the space which can build up credible cases and execute them in a way which delivers positive outcomes. We just had the case against Valve certified, notwithstanding the Supreme Court judgment in Evans.’ This refers to the Evans v Barclays Bank and Others ruling, which reinstated the CAT’s refusal to certify the collective proceedings on an opt-out basis, on the basis that these would provide a significant ‘leveraging’ advantage to claimants. This had raised concerns in relation to certification of future claims. 

Mohsin Patel, director and co-founder at litigation finance broker Factor Risk Management, shares Pearman’s optimism: ‘It’s now clear that scepticism towards litigation funding, which was used in the [Kent v Apple] case to finance legal support for the claimants, has been misplaced. While the supposed downsides of litigation funding have been much touted by the liability insurance industry, financing provides much-needed access to justice in an environment where consumer protection is often lacking. Put simply, this claim and ones like it wouldn’t have been brought to trial without external funding.’ 

He adds that ‘many critics point to these huge budgets as a sign that some of these cases are little more than a fee-generating exercise for law firms and funders. In response, the CAT is applying greater scrutiny over funding budgets and fee structures. It’s important to note, however, that defendants and their legal teams are often the largest cause of increased costs, as they try to delay and obfuscate to avoid judgment. The number of decisions appealed thus far in the CAT is testament to this fact’.

Dorothea Antzoulatos and Rodger Burnett are directors and co-founders of boutique litigation firm Charles Lyndon, which together with Hausfeld represented claimants in the boundary fares claims against the train operators, funded by Woodsford Litigation Funding. 

‘The number of new claims being issued isn’t because there aren’t claims to be made,’ observes Antzoulatos. ‘Rather, the funding market is waiting to see more outcomes. A lot of funders have money tied up in ongoing CAT cases and they’re waiting to see how that goes. There is still some appetite from funders, but they are taking more of a wait-and-see approach at the moment.’ 

‘Funders are looking for certainty,’ notes Burnett. ‘When you implement something new, there are always unforeseen circumstances, and the tribunal has been navigating its way through to try to create something that’s fair for everyone, and primarily for the class involved in these proceedings.’ 

He refers to the three-legged stool analogy used by Hodge Malek KC, the chair of the settlement tribunal in the boundary fares case. This represents the balance of stakeholder interests – class members, legal teams, and litigation funders and insurers – required for stability. If one leg is unsupported, the settlement becomes unstable. 

Regime change?

Responses to the DBT’s consultation predictably fall into two camps. The claimant side focuses on consumer redress and supports the current regime; the defendant side on protecting legitimate business activity, the need for light-touch regulation and potentially broadening the regime’s scope.  

Antzoulatos envisages that ‘the Civil Justice Council review will bring in some kind of regulation of the funding market, although they are clear that funders are necessary for class actions and a lot of litigation in the UK. They want to do something that regulates funding while also ensuring that litigation remains a viable investment’. Like others, she is less certain about the outcome of the DBT consultation.  

Ultimately, progress has been made, but only very recently, with landmark decisions, and the government’s announcement of its intention to reverse PACCAR occurring after the DBT call for evidence. 

Hammeke at BRG observes that these developments could reverse the decline in case filings, unless this was due to other factors such as funders’ exposure and negative outcomes for class representatives. 

He refers to suggestions from some practitioners that the government consultation has come too early, because although the regime was introduced 10 years ago, it has only been operating effectively since the Supreme Court judgment in Merricks. 

Bosley observes: ‘While there have been over 60 cases filed at the CAT, there have been only a handful of judgments, so it’s hard to see how the regime is going to play out, whether it is too permissive, or potentially too difficult to bring claims. For example, if we see more defeats, the number of claims may fall again.’

Exton Advisors’ analysis of responses to the DBT call for evidence found that most are broadly supportive of the regime. They favour targeted refinements with a view to stabilising funder appetite, improving procedural efficiency and reducing costs. 

While claimant-aligned responses caution against any narrowing of scope and the defence perspective focuses on mismatches between funder recovery and class recovery in some settlements, there is general agreement on the benefits of improving predictability around quantifying damages and funder returns.

Will changing the system now stifle a market that is finally achieving some clarity and positive outcomes for consumers and small businesses? Or does the system need tweaks to make it more effective for more of its stakeholders? 

There is general agreement that the best way to raise awareness and improve consumer redress is for more cases to succeed, putting more money in claimants’ pockets. But these have to be legitimate claims that drive positive change in the way big businesses operate, rather than putting them under pressure to settle claims that may or may not be meritorious. It is a difficult balance, but getting it right will improve the UK’s business environment and support economic growth. 

Joanna Goodman is a freelance journalist