Blow for UK consumers as advocate loses £1.3 billion class action against BT

The competition court has today dismissed a claim that BT overcharged 3 million UK landline customers

The Competition Appeal Tribunal has today ‘unanimously’ dismissed the £1.3 billion claim that accused BT of overcharging for its landline services. The ruling means BT does not have to pay out any compensation.

This follows the eight-week trial that took place between January and March 2024 in which the tribunal heard that the telecoms giant had been charging customers ‘excessive and unfair’ prices for standalone landlines and calls.

Justin Le Patourel, representing UK consumers in bringing this claim, and his legal team said this was in violation of BT’s ‘special responsibility’ as a dominant firm under competition law.

The Tribunal agreed with Le Patourel that BT was dominant in the market for landlines, and had used this dominance to charge significant and ‘persistently excessive’ prices for its services.  

But concluded that, although the prices were excessive, it did not consider them to be unfair because it felt that BT provided ‘distinctive value’ to its customers and the prices bore a reasonable relation to value. 

This overcharging was said to have affected 3 million UK landline customers, many of whom are older and vulnerable, but the Tribunal also rejected the suggestion that BT was exploiting ‘price insensitive’ customers.

Justin Le Patourel, and the millions of BT customers who would have been in line to receive hundreds of pounds in compensation, have been left disappointed. Le Patourel said:

‘We are pleased that the Tribunal agreed with our experts’ view that BT was a dominant  operator which charged excessive prices to its loyal customers. 

‘However, I am disappointed that the Tribunal did not ultimately find in our favour on the question of whether BT’s prices were unfair.’

Le Patourel and his legal team are considering their options following the Tribunal’s ruling, including whether they will appeal the decision.

3 million BT customers lose out on compensation

The Tribunal’s decision means 3 million BT customers will not receive compensation estimated to be between £300 and £400 (or more) each, as part of the proposed £1.3 billion in compensation. 

Under the Competition Act 1998, companies that have market dominance have a special duty not to price unfairly. 

In this case, the Tribunal found that BT was dominant in the market for standalone fixed voice (landline) services in the UK excluding Hull. One way in which a price may be said to be unfair is that it is excessive because it bears no reasonable relation to the value of the product or service supplied. 

In 2017, watchdog Ofcom said that BT had unfairly charged millions of landline customers from 2015 after an investigation. At the time, BT agreed to reduce the price of its landlines.

However, Le Patourel filed a claim against BT saying he believed the telecoms provider owed compensation payments, arguing that many customers were vulnerable and were owed refunds.

The claim against BT was said to have affected two types of BT customer: 

1. Over 1.5m ‘landline-only’ customers who took a BT landline phone but no broadband service between October 2015 and April 2018. The Ofcom investigation in 2017 estimated that these customers were overcharged by up to £84 a year. In 2018, BT cut future bills accordingly but did nothing to compensate customers for what Le Patourel said were many years of overcharging that took place prior to this.  
2. Over 2m ‘split purchase’ customers who took a BT landline and also a broadband service from either BT or another provider, but under separate  contracts. These customers were said to have paid substantially more than those who took exactly the same services but bought them as a single discounted ‘bundle’.  

Le Patourel added: ‘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.’ 

Landmark case for UK collective action regime

This ability to bring group claims for breaches of competition law came into force under the Consumer Rights Act 2015 .

The claim against BT was the first collective proceedings tried since the Consumer Rights Act 2015 introduced the regime in the UK.  

Le Patourel’s legal adviser, Sarah Houghton, partner at Mishcon de Reya, said: ‘As the  first collective proceedings tried since the Consumer Rights Act 2015 introduced the regime  in the UK, this is a watershed moment in the development of the collective proceeding  regime in that it is the first judgment of its kind.  

‘We are grateful to the Tribunal for the time spent hearing and considering the evidence.  However, we are disappointed that the Tribunal did not agree that the excessive prices  charged by BT were unfair in terms of amounting to a breach of competition law.  

‘Mr Le Patourel is a passionate advocate for BT’s loyal customers and is carefully  considering with his team of advisers what the next steps should be.’ 

BT maintained throughout the trial that its pricing was not anti-competitive. In response to the Tribunal’s decision, a BT spokesperson said:

‘Today the Competition Appeal Tribunal handed down its judgment in the case of Justin Le Patourel v BT Group plc (“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.’

Your right to holding rule-breaking companies to account

The collective action regime plays an important role in helping consumers hold rule breaking companies to account.

It enables consumers to hold big companies accountable for abusing their dominant position in the market without consumers having to foot the bill for legal action. 

Alex Neill, co-founder of Consumer Voice, said:

‘This decision will be a bitter pill to swallow for many consumers particularly when the court has acknowledged that BTs prices for certain landline customers were persistently excessive. 

‘However, it has ultimately decided they weren’t unfair and the claim has failed. 

‘This only serves to underline that these claims are big and complex and every case will be decided on its merits.’

There are dozens of other cases lining up for trial over the coming years. Consumer Voice is here to help people easily track the progress of each claim and, if won, make the process easy, quick and simple to work out if you’re eligible to claim.

Support us on our mission to help consumers get back the money they’re owed from rule-breaking businesses by signing up to Consumer Voice.

What are group claims?

It isn’t always obvious when you’ve been ripped off by the companies you deal with, and this can make it impossible to stand up to big businesses. That’s why the law in the UK offers another route to accessing justice via a group claim or collective action. 

This is where a legal claim is brought on behalf of a group of people who have all experienced a similar loss as a result of the law being broken. Law firms have to bring these group claims to a court or tribunal to get compensation for consumers. 

These claims can either be brought by one individual representing others (like with the BT claim fronted by Justin Le Patourel) or by a number of individuals coming together to take the claim as a single group (think the Post Office Horizon and VW emissions scandals).

Claims like the BT claim are known as opt out claims and can only be filed in cases concerning breaches in competition law. For example, an illegal cartel of businesses who cheat customers by agreeing not to compete, or companies that abuse their dominant market position by behaving in a way that will limit competition or harm consumers (e.g. by charging higher prices than they would in a competitive market).

Any other breaches in consumer laws would need to be filed as an opt-in claim – this is where court proceedings are issued for each individual in a claim and these are managed collectively. One of the largest consumer group collective actions of this kind is the VW diesel emissions claim in which claimants received a combined £193 million in an out-of-court settlement.