In recent years, and particularly following the EU’s Class Action Directive coming into effect in 2023, the collective actions market in the UK continues to expand and gain interest. As more collective actions are brought forward, the number of opportunities for the courts to provide guidance on questions relating to key procedural and substantive matters increase. Where we have seen perhaps the most notable collective actions developments in the UK is in the competition sphere.

For background, the likely reason for collective actions catching on in the competition sphere is that the UK’s only ‘opt-out’ class action regime operates within the competition law space. As referenced later, the prevalence of litigation funding in many cases sets the scene for the Competition Appeal Tribunal (CAT) to be faced with claims across a broad range of industries. 

The attractiveness of an opt-out mechanism has also seen claimants pushing the boundaries of competition law by filing claims that may have previously been the subject of claims based on consumer, environmental, data protection or other laws. However, as discussed in relation to the BT case later, the CAT is setting a high bar for alleged anti-competitive practices to be deemed as such.

From a procedural perspective, key judgments have been issued that are likely to shape the future of the collective actions landscape, providing ‘blueprints’ that offer guidance to key market participants on the likely demands of pursuing and defending collective actions. These cases have tended to focus on alleged abusive practices of Big Tech companies, particularly with regard to claims of potential excessive pricing. Interestingly this is something we have seen more frequently in relation to the pharmaceuticals sector, and perhaps further indicates the collective action trends taking hold more broadly in the market.

In December 2024, the CAT dismissed the first competition class action to proceed to trial with the potential for £1.1bn in damages, which was notable for several reasons. This case turns on the alleged claim that BT charged unfairly high prices to 3.7 million customers. While the prices were found by the CAT to be excessive, they were not unfair. This case therefore demonstrates the CAT’s threshold for activity to be deemed unfair and may deter other similar claims. 

This case was also noteworthy in that the CAT indicated that if successful, it will consider a variety of distribution mechanisms, including cy-près awards and the use of claims administrators, to ensure that damages are distributed fairly and efficiently. In this case the CAT explored the possibility of distributing damages through account credits, highlighting the potential for novel solutions in this area. 

Following this judgment, 2025 seems set to be a defining year for competition class actions. Depending on these outcomes, previous blueprints will be significantly expanded, setting new standards.

This year is also set to be pivotal in relation to litigation funding. Last year a proposed bill that addressed litigation funding arrangements was not taken forward following the general election. The UK government has now indicated that it will “take a more comprehensive view of any legislation” on litigation funding following the Civil Justice Council’s (CJC) review of the industry, which is expected to produce a report this summer that will examine broader structural issues relevant to the litigation funding market, including cost recoverability and exemplary damages.

Conclusion

The jury is still out as to collective actions and their effectiveness in delivering redress for class members and attractive returns for participants. As discussed, 2025 could be pivotal in bringing to the fore the boundaries and parameters of potentially successful claims.

Frances Murphy is a partner in Morgan Lewis’s London office focused on competition law and antitrust matters.