Court of Appeal Upholds CAT Judgment in dismissing BT Landline Pricing Class Action

On 1 August 2025, the Court of Appeal handed down its landmark judgment in Le Patourel v BT¹ refusing the class representative permission to appeal the Competition Appeal Tribunal's ("CAT") dismissal of the opt-out class action against BT² which alleged excessive and unfair pricing in relation to BT's landline telephone services. We outlined the implications of the CAT's judgment in this previous previous update.

The Court of Appeal upheld the CAT's decision finding that BT's prices were justified and fair, and that the claim for damages therefore failed.

This update summarises the key findings and legal principles from the Court of Appeal's judgment, which provide important guidance for future UK stand-alone antitrust class actions, particularly those involving allegations of excessive pricing.

Background

The underlying claim, certified as an opt-out collective action, alleged that BT abused a dominant position in the market for Standalone Fixed Voice ("SFV") services by charging excessive prices to two categories of customers in the period 2015-2022: voice only customers and split purchase customers. The claim relied on a comparison between BT's SFV prices and the cost of provision, as well as price differentials with bundled services (voice and broadband).

The CAT found that while BT was dominant in the relevant market and its prices exceeded the competitive benchmark ("Cost-Plus"), the excess was justified by factors including brand value and additional service features, and was therefore not abusive under competition law. The class representative's application for permission to appeal was refused by the CAT, leading to the present application to the Court of Appeal.

Key Issues on Appeal

The appellant class representative sought permission to appeal on four principal grounds:

1. Evaluation of Expert Evidence and Adverse Inferences: the CAT erred by failing to draw adverse inferences from BT's decision not to generate or disclose certain cost data, and by according undue weight to BT's expert evidence on indirect costs.

The Court of Appeal held that the CAT was entitled to exercise its discretion in evaluating the available evidence, including expert opinion, and was not required to draw adverse inferences in the absence of a finding that BT's conduct materially obstructed the CAT's ability to reach a fair conclusion. The Court of Appeal emphasised that the CAT's approach to weighing incomplete or imperfect evidence, and its decision to blend competing expert methodologies, fell squarely within its fact-finding discretion.

2. Allocation of Common Costs and Use of the SAC Combinatorial Test: the appellant challenged the CAT's attribution of 40% of BT's common costs to SFV services, contending that the CAT irrationally relied on the Stand-Alone Costs Combinatorial ("SAC Combi") analysis, which the CAT had itself criticised.

The Court of Appeal found that the CAT's reference to the SAC Combi analysis was limited and did not amount to wholesale reliance. Instead, the CAT adopted a pragmatic, balanced approach, taking into account the limitations of both parties' expert evidence and arriving at its own reasoned allocation of common costs.

3. Justification of Price Differential and Economic Value: multiple arguments that the CAT erred in concluding that the excess of BT's prices over Cost-Plus was justified and fair. These included alleged misdirection as to the significance of the price excess, failure to consider whether such prices would persist in a competitive market, and errors in the assessment of customer switching, willingness to pay, and the value of additional service features and brand.

The Court of Appeal rejected these arguments, holding that the CAT's evaluative discretion in this area was broad, and had not been exceeded in this case. The CAT's findings on customer engagement, switching behaviour, and the incremental value of service features and brand were supported by the evidence and did not involve errors of law.

4. Compound Interest: The appellant's challenge to the CAT's refusal to award compound interest was rendered academic by the Court of Appeal's refusal of permission to appeal on the liability and quantum grounds.

Key takeaways

• Judicial discretion in evaluating evidence: The Court of Appeal reaffirmed the CAT's broad discretion in evaluating complex and contested expert evidence, particularly in cases involving cost allocation and economic value. The Court of Appeal will not interfere absent irrationality or error of law.
• Adverse Inferences: The drawing of adverse inferences from a party's failure to adduce evidence is context-dependent and not automatic. The CAT is not required to penalise a party unless the failure materially impedes its ability to reach a fair conclusion.
• Assessment of Excessive Pricing: The CAT's fact-specific, blended approach to expert evidence and value assessment was endorsed by the Court of Appeal. The two-limb United Brands test remains central: (i) whether prices are excessive (which has been determined in subsequent cases by reference to Cost-Plus), and (ii) whether any excess is justified by reference to economic value, including brand and service features.
• Role of Comparable Markets and Switching: Evidence from comparable, workably competitive markets and customer switching behaviour can inform the assessment of economic value and justification for price differentials, but does not dictate outcomes.
• Reasoning and Quantification: The CAT is not required to provide precise quantification of the value attributed to each feature or to articulate a detailed "tally" of how value justifies price differentials, provided its reasoning is adequate in context.
• Adverse outcome for the claimants and funder: As this was the first claim in the CAT's Collective Proceedings Order ("CPO") regimes to reach trial, its ultimate failure despite relative ease of certification may be viewed as a warning signal for funders and claimants operating in the broader CAT CPO regimes. The complete loss of a c.£17 million investment by the funder, plus the adverse costs liability of 85% of BT's costs (c.£19.8 million, which notably exceeds the limits of the class representative's ATE insurance policy) may well be giving others pause for thought on the attractiveness of pursuing standalone claims in particular.