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UK Court of Appeal widens the door for “opt out” class actions

Head of Dispute Resolution Services Robin Henry comments on the Court of Appeal’s decision on FX Claim UK.

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Published 26 July 2023

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  • Financial services

The Court of Appeal’s judgment in Evans v Barclays [2023] EWCA Civ 876 on 25 July 2023 has given the go ahead for FX manipulation class actions on an “opt out” basis. This paves the way for opt out claims to be made in future by businesses as well as consumers.

This is a very significant judgment, with the Court providing strong support not only for those claiming compensation for FX manipulation by banks but also for the development of UK class actions generally. This represents a substantial step forward in opening the door for US style opt out competition law class actions.

The case concerned Phillip Evans and Michael O’Higgins as competing class representatives for claims of FX manipulation against Barclays and other banks. In giving the go ahead for the claims to be on an opt out basis, the Court reversed the 2022 decision of the Competition Appeal Tribunal (the “CAT”). The practical effect of the decision in allowing an opt-out rather than an opt-in procedure is that instead of the claims likely failing because not enough claimants will sign up to them, they will now have the critical mass to proceed, with claimants benefiting from a successful outcome, even if they have not taken active steps to participate in the litigation.

Although in the Mastercard v Merricks case (UKSC 2019/0118), the Supreme Court previously approved an opt out basis for competition claims, that involved claims by consumers who would never have been able to bring litigation proceedings individually.  In the case of Evans and O’Higgins v Barclays, the CAT decided that an opt in basis was more appropriate where the class members were likely to be sophisticated litigants (even when there was evidence that an opt in basis would still not attract sufficient support to be viable). The Court of Appeal disagreed with the CAT’s view, holding that since an opt in procedure was not viable, an opt out procedure was preferable in the interests of access to justice for the thousands of business claimants who have aggregate claims of £2.7 billion.

For more information, visit our Banking & Financial disputes page.

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Shorter Reads

UK Court of Appeal widens the door for “opt out” class actions

Head of Dispute Resolution Services Robin Henry comments on the Court of Appeal’s decision on FX Claim UK.

Published 26 July 2023

Associated sectors / services

  • Banking & financial disputes
  • Financial services

Authors

The Court of Appeal’s judgment in Evans v Barclays [2023] EWCA Civ 876 on 25 July 2023 has given the go ahead for FX manipulation class actions on an “opt out” basis. This paves the way for opt out claims to be made in future by businesses as well as consumers.

This is a very significant judgment, with the Court providing strong support not only for those claiming compensation for FX manipulation by banks but also for the development of UK class actions generally. This represents a substantial step forward in opening the door for US style opt out competition law class actions.

The case concerned Phillip Evans and Michael O’Higgins as competing class representatives for claims of FX manipulation against Barclays and other banks. In giving the go ahead for the claims to be on an opt out basis, the Court reversed the 2022 decision of the Competition Appeal Tribunal (the “CAT”). The practical effect of the decision in allowing an opt-out rather than an opt-in procedure is that instead of the claims likely failing because not enough claimants will sign up to them, they will now have the critical mass to proceed, with claimants benefiting from a successful outcome, even if they have not taken active steps to participate in the litigation.

Although in the Mastercard v Merricks case (UKSC 2019/0118), the Supreme Court previously approved an opt out basis for competition claims, that involved claims by consumers who would never have been able to bring litigation proceedings individually.  In the case of Evans and O’Higgins v Barclays, the CAT decided that an opt in basis was more appropriate where the class members were likely to be sophisticated litigants (even when there was evidence that an opt in basis would still not attract sufficient support to be viable). The Court of Appeal disagreed with the CAT’s view, holding that since an opt in procedure was not viable, an opt out procedure was preferable in the interests of access to justice for the thousands of business claimants who have aggregate claims of £2.7 billion.

For more information, visit our Banking & Financial disputes page.

Associated sectors / services

  • Banking & financial disputes
  • Financial services

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