London firm Mishcon de Reya, with financial backing from funder Harbour, has filed a collective claim worth almost £600m against BT over alleged historic overcharging for landlines.
The claim at the Competition Appeal Tribunal is brought on behalf of representative Justin Le Patourel, a one-time head of market intelligence at telecoms watchdog Ofcom who founded CALL (Collective Action on Land Lines).
Mishcon said that, in 2017, Ofcom found that BT had been overcharging millions of landline customers since 2009 by raising prices while the wholesale costs of providing landlines fell. The result was that BT agreed to reduce its landline prices by £7 a month.
However, BT was not ordered to pay compensation and the action is seeking the return of the overcharges from 2015 onwards only due to limitation rules.
If successful, 2.3 million of BT customers who purchased a BT landline but did not also take BT broadband will receive payments of £200-500 each, the firm said.
These customers were, according to Ofcom, more likely to be old, on low incomes and vulnerable.
Mr Le Patourel is also seeking compensation for customers who took both a broadband service and a BT landline, but not together as a package; these people were excluded from the 2017 price cut “and so continue to be overcharged to this day”, he claims.
The claim website says it would ask the tribunal for Harbour to be remunerated out of any unclaimed compensation, meaning claimants would not have to contribute towards the funding.
Harbour would seek to recover the legal costs of the claim directly from BT.
Mishcon partner Rob Murray said: “The claims of customers directly harmed by BT’s exploitative behaviour are precisely the type of claims the collective actions regime is designed to deal with.
“We hope very much that a settlement can be reached to resolve them in line with BTs acceptance of the need to avoid overcharging when investigated by Ofcom.”
Mishcon managing associate Natasha Pearman added: “It is a classic example of a loyalty penalty, which were the subject of a super complaint by Citizens Advice, due to their harmful effects on consumers.
“It will take time to gather evidence and bring it to trial, but we are very confident that eventually millions of BT’s most loyal customers – many of whom are older and potentially vulnerable – will receive a significant rebate.”
BT said it would defend itself “vigorously”, saying it “regrets being drawn into litigation on a topic which Ofcom considered more than three years ago”.
The statement continued: “At that time, Ofcom’s final statement made no finding of excessive pricing or breach of competition law more generally. The claim seeks to hold against BT the fact that it implemented a voluntary commitment to reduce prices for customers that have a BT landline only and not to increase those prices beyond inflation…
“We take our responsibilities to older and more vulnerable customers very seriously and will defend ourselves against any claim that suggests otherwise.”
Last month’s Supreme Court ruling in the Merricks v Mastercard case is expected to unblock the problems with class certification in collective actions.
Meanwhile, a claim brought by more than 2,500 Zambian villagers – including 643 children – over alleged pollution from a copper mine run by Leigh Day has settled on confidential terms.
The claim, issued in 2015, centred on pollution from the Nchanga copper mine, run by Konkola Copper Mines, with 16,000 employees in Zambia, the country’s biggest private employer. Vedanta Resources, one of the largest mining companies in the world, bought a controlling share in Konkola, in 2004.
In a joint statement, they said: “Without admission of liability, Vedanta Resources Limited and Konkola Copper Mines PLC confirm that they have agreed, for the benefit of local communities, the settlement of all claims brought against them by Zambian claimants represented by English law firm Leigh Day.”
The claimants alleged that toxic effluent discharge from the mine severely impacted the lives of people living in nearby villages, where the primary source of income is farming and fishing.
In 2019, the Supreme Court ruled that the case could be brought against Vedanta in the English courts because, as Konkola’s parent company, the company arguably owed the villagers a duty of care.
The Supreme Court found there was a real risk that the claimants would not be able to achieve justice in the Zambian courts due to lack of funding and legal expertise available.