Water and Sewerage Group Claim in England: the Competition Appeal Tribunal collective proceedings regime continues to be tested


Claimants are finding novel ways to advance collective proceedings, including the increasingly popular collective proceedings regime in the Competition Appeal Tribunal ("CAT").  While this regime was introduced to facilitate competition law claims, claimant law firms are finding creative ways to use it for matters that do not appear, at first blush, to be "competition" related matters at all. 

In the latest development, last week the claimant law firm Leigh Day announced that they had secured funding from Bench Walk Advisors, a third-party litigation funder, to pursue collective proceedings by a "significant class" of UK bill-paying households against water and sewerage companies in England in relation to alleged "unlawful discharges of untreated sewage and wastewater".  Leigh Day's announcement indicates that the claim will address claims of environmental harm, notwithstanding the use of the CAT collective proceedings regime. 

In this briefing we examine the details of the claim, and explore the growing popularity of the CAT collective proceedings regime with claimants. 

Collective Proceedings in the Competition Appeal Tribunal

The Consumer Rights Act 2015 introduced a new collective proceedings regime to the United Kingdom in respect of certain competition law claims. The Act introduced changes to the existing regime, including to allow "opt-out" proceedings with the aim of making a "class action" regime more workable. While this regime has now been in place for several years, the last 18 months have seen an exponential growth of cases advanced using this procedure. 

   What is a collective proceeding?

Collective proceedings combine two or more claims.  They are brought on behalf of a defined class of persons by a representative. Although in other jurisdictions they are available in a broad range of circumstances, collective proceedings in the United Kingdom may only be brought in respect of a breach of specified provisions of competition law.

Collective proceedings may be brought only before the CAT. They cannot proceed as of right; instead, the proposed class representative must be authorised to act as such, and the proposed claims must be certified by the CAT as eligible for inclusion in collective proceedings. This involves the class representative applying for, and the CAT making, a collective proceedings order ("CPO").

To date, few CPOs have reached the stage of certification by the CAT.  However, there has been a huge growth in the number of such CPOs filed following the much-publicised decision of the Supreme Court in MasterCard Inc. v Merricks [2020] UKSC 51 (for more on this decision, please see the article in our Dispute Resolution Yearbook 2022).  As we wrote in the Dispute Resolution Yearbook 2022, as of April 2022, there were eight outstanding CPO applications before the CAT.  There are now 15 such CPO applications pending a final certification decision from the CAT; a further five such applications have been certified. 

Developing trends: novel use of the CPO regime

The CPO regime is available only in respect of claims in respect of certain alleged breaches of competition law.  Those are, in broad summary, claims relating to the alleged abuse of a dominant market position, or alleged agreements or concerted practices which have as their object or effect the restriction of competition.  

Claimant law firms have been attempting to apply the CPO regime in creative contexts.  For example, the applicant in the BSV Claims Ltd action seeks a CPO on behalf of relatively UK-based holders of the failed cryptocurrency Bitcoin Satoshi Vision ("BSV").  The applicant alleges that various cryptocurrency exchanges "colluded" to de-list BSV in 2019, leading to a collapse in its value.  Similarly, another CPO applicant alleges that Apple abused its dominant position in the smartphone market to conceal battery issues and deliberately slow down the processors in approximately 44.2 million iPhones.

Against that background, the fact that Leigh Day have announced that they intend to bring their claim against water and sewerage companies in the CAT via the CPO regime is less surprising.  In the accompanying press release the exact legal basis of the claim is not stated, although it is presumably based on overcharging for the actual service provided, representing an abuse of dominance by way of excessive pricing (an allegation also made in a recent published economic report by consulting firm Fideres).  Rather than focusing this, however, the focus of the press release is on the environmental angle and the novelty of the claim before the CAT.  While, certainly, the claim is novel (as there have to date been no other CPOs relating to environmental harm) the proposed class representative will need to demonstrate that the relevant claims may properly be eligible for inclusion in collective proceedings, including because they are properly characterised as "competition" claims falling within the scope of the CPO regime.  

Issues for respondents to consider

As this is a fast-developing area of the law it can be challenging for respondents to CPOs to understand.  What we have seen from the CAT's decisions in respect of CPO applications is that:

  • The certification process is not about, and does not involve, a merits test and the claim will only have to clear a strike-out / summary judgment hurdle, which might not even be formally raised.

  • The CAT has taken an expansive approach to the requirement that the collective proceedings relate to common issues. In circumstances where a proposed class representative seeks an aggregate award of damages, it is not necessary to demonstrate that each class member has suffered loss; there need only be a realistic and plausible method of estimating aggregate damages to the level of the class.

  • The CAT has also taken a flexible approach to the application of the "relative suitability" test described by the Supreme Court in Merricks. For example, the CAT in BT Group concluded that the small value of each individual claim, low likelihood of any class member bringing a claim on an individual basis, and availability of a credible methodology for calculating damages outweighed the relatively high cost of the proceedings as compared to the level of damages sought.  On that basis, the CAT determined that the claims were suitable for inclusion in collective proceedings.

  • The CAT has in practice shown a broad preference to certify applications on an "opt-out" rather than "opt-in" basis where possible.

As claimants seek to apply the CPO regime creatively in various contexts, we are likely to see further guidance from the CAT as to its proper scope.  Certainly, this is an area to keep an eye on and this is unlikely to be the last creative claim that the CAT will face. 

Travers Smith's award-winning Dispute Resolution practice has particular expertise in both opt-out proceedings before the Competition Appeal Tribunal (defending the only opt-out application to be entirely rejected by the CAT), and also in relation to novel ESG-related group actions.  The Dispute Resolution practice works closely alongside the Environment & Regulatory Law group (ranked Tier 1 in the Legal 500 in both Environment and in Corporate Governance).


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