UK Collective Proceedings: Mid-2025 Review

State of Play

A number of significant developments in the UK collective proceedings regime (the UK CPO regime) have marked the past several months. The current landscape continues to evolve. Recent Competition Appeal Tribunal (CAT) decisions refusing to certify various collective proceedings, which we unpack below, follow the first-ever substantive judgment of the CAT in collective proceedings in Le Patourel v. BT.¹ In late 2024, the CAT handed down a lengthy judgment, dismissing the claim on the basis that, broadly, landline prices charged by BT, although excessive, were not unfair.² From the perspective of defendants and companies potentially facing the threat of a collective action, the judgment demonstrates that the CAT will carefully scrutinize merits on a case-by-case basis.

In the first quarter of 2025, trials also took place in the collective proceedings in McLaren v. MOL (regarding two remaining defendant groups)³ and in Kent v. Apple.⁴ Judgments are currently awaited in both cases. The next scheduled trial is in Which? v. Qualcomm,⁵ which is set to begin in October 2025.

Update on Certification Requirements

Although the threshold for certification is low, the CAT’s decision in Riefa v. Apple and Amazon⁶ demonstrates that collective claims can be rejected at an early stage if the class representative does not persuade the CAT that he or she can adequately protect the interests of the proposed class. Unlike in Gormsen v. Meta, where the CAT initially refused certification in early 2023⁷ but allowed the class representative to amend her claim and reapply, securing certification a year later,⁸ Professor Riefa’s claim against Apple has been denied certification.

In Riefa, the Tribunal — chaired by Mrs. Justice Bacon, who has recently been announced as the new CAT President — had concerns about the proposed class representative’s funding arrangements and decided that, in the particular circumstances, the proposed class representative should be cross-examined on these arrangements at a hearing.

Following this hearing, the CAT handed down a judgment finding that the proposed class representative lacked an effective understanding of the funding arrangements and did not demonstrate sufficient control of the litigation and the necessary level of independence. Following this refusal of certification, the proposed class representative has been ordered to pay Apple and Amazon more than £3 million in costs. This outcome, subject to any appeals, will likely prompt “claimant” stakeholders, including lawyers and funders, to carefully consider the arrangements they have in place with the potential of adding a funding expert to their advisory boards to ensure the proposed class representative is fully versed in the funding details.

Separately, in a collective action brought against Thames Water and other water companies,⁹ the proposed class representative alleged that customers were overcharged for sewerage services permitted by the relevant regulator, Ofwat, based on misleading reporting information supplied by water companies to the regulator.¹⁰ The claim failed to secure certification because the relevant regulation applicable to the water industry precluded it. The proper forum for the type of concerns raised was Ofwat at a regulatory enforcement level rather than private damages litigation. Accordingly, the collective action against the water companies is one of a small number of cases in which certification has been refused, albeit on very different grounds from Riefa. However, the Court of Appeal has granted the proposed class representative permission to appeal, meaning it will hear the case at a substantive hearing in due course.

Further High-Profile Collective Settlements

The collective action in Merricks v. Mastercard, which was originally valued at approximately £14 billion, resulted in the first contested collective settlement in the UK.¹¹ The class representative settled with Mastercard for only £200 million, a fraction of the original valuation. Mr. Merricks’ funder, Innsworth, (fiercely and publicly) opposed the proposed settlement as insufficient in terms of its return. The settlement nevertheless received the CAT’s approval, underscoring that the Tribunal will take a pragmatic approach when reviewing proposed settlements.

The CAT acknowledged in its judgment that the settlement was “an extraordinarily low proportion (under 1.5%) of the claim as originally advanced in 2016, and under 1.2% of the claim as revised in late 2022.”¹² However, the level of settlement reflects the fact that the value relating to approximately 95% of the claim would have been at serious risk at trial. In light of these factors, the CAT found the settlement to be just and reasonable.

The CAT deferred the specifics of the distribution to a later date. However, the class members will collectively receive at least £100 million, with the potential for more depending on the take-up rate, and Innsworth will receive £68 million. The latter figure comprises the funder’s costs of approximately £45 million and a return at a multiple of 1.5 . Innsworth has since filed an application for judicial review of the distribution plan, challenging the split of settlement funds between class members, the funder, and the charity ordered by the CAT, although Innsworth has not appealed the CAT’s underlying judgment approving the settlement itself.

In another recent development arising from the settlement approved in 2024 in a collective action challenging rail ticketing practices,¹³ class members have reportedly claimed just over £200,000 out of the available £25 million agreed settlement fund. The likely reason behind the very low take-up rate is the fact that in the vast majority of collective proceedings, individual compensation per class member tends to be negligible, often in single digits, and many consumers who might be eligible for compensation continue to be largely unfamiliar with the UK CPO regime. The CAT has listed a hearing for later this year to consider issues related to the distribution of the remaining balance.¹⁴

Court of Appeal Decision on Funding and Related Legislative Initiative

In late 2023, the CAT certified an earlier claim against Apple brought by Justin Gutmann (the same class representative from the train ticketing case) concerning allegations that Apple concealed battery issues and slowed down the processors in tens of millions of iPhones.¹⁵ The certification was granted based on the understanding that, in light of the Supreme Court’s judgment in PACCAR (which prohibited funders’ recovery from being based on a percentage of damages in collective proceedings),¹⁶ the class representative would amend the terms of funding such that they would comply with that judgment.¹⁷ A few months later, the CAT approved the amended litigation funding agreement,¹⁸ a decision which Apple challenged before the Court of Appeal.

The Court of Appeal upheld the CAT’s ruling, including that funders can receive their share of damages or settlement sums before funds are distributed to class members.¹⁹ What matters more than the order in which class members and stakeholders are paid are the proportions of damages to which they are respectively entitled. As long as the interests of the class are sufficiently protected — which requires an assessment of the terms and facts overall— individual funding provisions or particular arrangements might not be problematic. This decision recognizes the reality that collective actions would not be feasible without significant external litigation funding.

Another piece of welcome news for litigation funders is the Final Report on Litigation Funding published in early June 2025 by the Civil Justice Council’s Working Party on Litigation Funding. The main conclusion of the report is that the CJC recommends legislative action to reverse the effect of PACCAR. This recommendation is premised on the principle that litigation funding is a pillar of access to justice.

Looking Ahead

With a number of trials in collective actions now concluded, the body of case law continues to grow. Decisions (and potential appeals before the Court of Appeal and the Supreme Court) will continue to be critical to shaping the UK CPO regime, providing further guidance on the fundamental building blocks of collective disputes.

One of the emerging themes at this juncture is that the standard of certification is still evolving. At the inception of the UK CPO regime, the certification threshold was perceived to be extremely low. However, the most recent decisions by the CAT refusing certification demonstrate that the CAT will carefully scrutinize collective actions.

The body of case law is also growing regarding settlements, and the recent decisions offer a number of takeaways for class representatives, funders, and advisers. The CAT clearly does not wish to stand in the way of settlements which are unopposed, and which broadly pass the tests of fairness to class members and reasonableness. However, if a conflict arises, the CAT’s decision in Merricks shows that it will prioritize class members’ interests, while also considering the interests of the funder. In Merricks, the CAT was careful to emphasize the “exceptional circumstances of this case,” and its decision “should not be regarded as a guide for more positive settlements of cases that reflect better the public policy behind the introduction of collective proceedings.” The appropriate return for funders in collective proceedings is a matter for debate. It will be interesting to follow how appellate courts will grapple with the challenge of striking a balance between an attractive litigation investment environment and safeguards for class members.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.