Final blow for millions of BT Customers over £1.3 billion claim

Court of Appeal shuts down last legal route for compensation over unfair landline charges

Around 3.7 million BT landline customers have lost their final chance at compensation after the Court of Appeal refused permission to challenge a tribunal ruling that blocked a £1.3 billion claim for unfair charges.

The Court of Appeal decision, handed down on Friday 1 August, marks the end of this landmark case that accused BT of exploiting its dominant market position to charge “excessive and unfair” prices – many of them paid by older and more vulnerable customers.

Consumer advocate Justin Le Patourel, who led the case, told Consumer Voice:

“It’s hard to believe the courts disagreed with Ofcom – the expert economic regulator – which had provisionally found that BT abused its dominant market position, unrestrained by competition, to charge excessive prices to its customers.

“At any point in this case, and at minimal cost, BT could have produced the financial data needed to settle the matter decisively. It chose not to. As a result, millions of pounds were wasted trying to unpick BT’s finances, and the courts were left to rule based on flimsy evidence.

“This sets a dangerous precedent for how other dominant firms might price their services – and leaves many frustrated BT customers in its wake.”

Despite the legal setback, Le Patourel remains committed to using collective actions to stand up for consumers. “This isn’t over,” Le Patourel added. “I’ve learned a great deal from this experience and fully intend to bring further actions against companies that profit by breaking UK competition law and mistreating people.

“Organisations like Consumer Voice are vital in the fight for stronger protections, fairer treatment, and better access to justice for consumers.”

Sign up to Consumer Voice to stay informed about major court cases fighting for millions of UK consumers, so you can help hold rule-breaking companies to account and claim the compensation you’re owed.

What the court decided

Le Patourel had asked the Court of Appeal to overturn a December 2024 ruling by the Competition Appeal Tribunal. But the Court found that the case raised mainly “factual and evaluative matters,” not legal errors – so it declined permission to appeal.

Law firm Mishcon de Reya said: “The class of over 3.7 million BT customers will not receive compensation under the claim, as there is no further avenue through which to challenge the Tribunal’s decision.”

What was the case about?

The claim focused on BT’s pricing between 2015 and 2018 for two groups of customers:

• 1.5 million ‘landline-only’ customers who didn’t take broadband and were allegedly overcharged by up to £84 a year
  
• 2 million ‘split purchase’ customers who paid more for taking BT landline and broadband services through separate providers

The Tribunal had accepted that BT held a dominant market position and charged “persistently excessive” prices. But it ruled that those prices weren’t unfair – because BT was found to offer “distinct value” in return.

No more routes to compensation

This latest ruling confirms there’s now no legal route for customers to receive individual compensation – previously estimated at £300–£400 per person.

Le Patourel expressed his disappointment:

“I feel hugely disappointed for the BT landline customers who persistently paid excessive prices. I wonder if they agreed with the courts that this was justified by BT’s brand or service.”

What it means for consumer rights

This was the first collective action to reach trial under the UK’s 2015 Consumer Rights Act. The law was introduced to help consumers challenge companies who break competition rules – without facing personal legal costs.

Gwen Ballin-Reeler, partner at Mishcon de Reya, said:

“We are disappointed by the outcome. It is to be hoped this result does not represent a step back for the competition collective action regime, which is designed to help redress reach consumers who would not be able to bring claims on their own.” 

The case also raises concerns about how difficult it is to prove that “excessive” prices are also unfair under UK competition law – a legal hurdle that remains high for future claims.

BT’s separate £18 million refund

While BT customers missed out on the £1.3 billion claim, they have received compensation in a separate case. Just last week, Ofcom announced BT must refund or credit £18 million to around 1.1 million customers after failing to give clear contract information.

This followed a £2.8 million fine in May 2024 for breaching consumer protection rules affecting BT, EE and Plusnet customers.

Holding rule-breaking companies to account

It isn’t always obvious when you’ve been ripped off by the companies you deal with, which can make it impossible to stand up to big businesses.

That’s why the law in the UK offers collective action as a route to accessing justice. 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. 

This case shows how difficult it is to hold powerful companies to account, even when they’re found to have overcharged loyal customers. For now, this particular battle is over. But the wider fight for fairer prices and stronger consumer protections continues.