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The Competition Appeal Tribunal (CAT) has allowed a class action claim – originally worth “at least” £3.285bn – against EE (BT), Vodafone (Three UK) and O2 (Virgin Media) to move forward, albeit with limitations. The case, brought by Justin Gutmann and law firm Charles Lyndon, accuses the operators of overcharging for mobile handsets beyond the end of their contractual term.
Just to recap. Mobile operators often offer a choice of either SIM Only (airtime) plans or bundles that include those in with a handset (e.g. Smartphone). However, the legal case itself centres around bundles, which tend to cost more because you’re also spreading the cost of the handset across the contract term. But issues often arise when some operators maintain the same monthly charge even after your contract ends (i.e. you effectively keep paying for the handset, which has already been paid off).
Savvy consumers impacted by this would just switch to a SIM-Only option on a different operator or re-contract to a new plan, but not everybody does that (some people just forget or don’t realise). Ofcom has since put pressure on the mobile operators to mend their ways and in recent years there have been improvements (with mixed success), but the aforementioned class action claim is more concerned with historic “overcharging“.
Back in 2023 Justin Gutmann, the former Head of Research and Insight at Citizens Advice, and law firm Charles Lyndon launched class action proceedings (here) against the major mobile operators (Loyalty Penalty Claim). The case alleged that the operators had been “abusing their dominant positions” by charging a “loyalty penalty,” in which long-standing customers were overcharged for handsets beyond the end of their contract.
The case claims that operators have overcharged on up to 28.2 million contracts and, as a result, would be seeking damages of at least £3.285 billion. If successful, someone who held a contract with just one of the mobile operators could receive as much as £1,823. Many consumers are expected to have claims against more than one mobile operator and so could, hypothetically, receive more than this, if it succeeds.
What’s the latest?
Back in April 2025 we reported that the mobile operators were attempting to get the case dismissed (here). The operators argued that the lawsuit was fundamentally flawed, not least because they say it alleges anti-competitive behaviour “in an industry renowned for its competitiveness” and because large parts of the case (dating back to 2007) were raised too late. They added that it would also be “extraordinarily difficult” for them to identify eligible class members.
The Competition Appeal Tribunal (CAT) has now ruled that claims for damages arising before 1st October 2015 in the Vodafone, EE, Three UK and O2 Proceedings are “struck out“. The operators had also sought to do the same for all claims for losses that arose between 1st October 2015 and 8th March 2017, but the court “refused” that part of the request and allowed it to proceed.
The Tribunal also ruled that they were “satisfied that the Eligibility and Authorisation Conditions were met and granted the CPO Applications in all four proceedings“, which is despite the mobile operators raising questions over Gutmann’s (Proposed Class Representative – PCR) ability to fund future proceedings and to fairly represent claimants. But the tribunal did direct the PCR to inform them “immediately of any material development in respect of his funding arrangements” and to provide them with an update on his current funding position in advance of the next case management conference.
In short, the case can proceed, albeit now with a much more limited scope and doubts remain over its prospects for success. A spokesperson for O2 separately told The Register (credits for spotting this development): “We maintain that there is no merit to Mr Gutmann’s case for the remaining period and will continue to robustly defend our position as it proceeds.”
A spokesperson for EE similarly echoed O2’s remarks and said they “do not accept the substantive allegations of the claim” and that their “priority is, and always will be, to provide a great experience for our customers“.
Big legal cases like these often have to grapple with complex issues, such as with respect to how the law approaches consumer choice, package / brand value and ignorance of contract details. At the same time mobile operators also have the freedom to set retail pricing however they so choose, albeit often restricted by the realities of natural competition (i.e. making your service too expensive can be counter-productive).
Lest we forget that the separate Collective Action on Land Lines (CALL) campaign recently tried and failed to argue a different class action case against BT (here), which related to the alleged overcharging of several million landline-only phone customers. The court ultimately dismissed the case and found that BT’s “prices were not unfair, and therefore there was no abuse of dominant position.”