Millions of consumers who have been ripped off by big companies could be in line for payouts thanks to a host of high profile collective lawsuits building in the UK.
Known as “class actions”, the lawsuits involve a group of people coming together to make the same legal claim. One person then takes the company court on behalf of those affected.
A number of collective lawsuits are making their way through the UK legal system right now which, if successful, could see millions of people receiving payouts of up to £3,000 if you happen to qualify for all of the affected firms.
Here, Telegraph Money explains how class actions work, how much you could get, and whether you’ll actually see any money.
What is a class action lawsuit?
While mass participant suits have long existed in the US, chasing compensation for victims who have lost out at the hands of major firms, it’s come to the UK fairly recently.
The change was heralded with the introduction Consumer Rights Act 2015, which enables collective actions to be brought on an opt-out basis for breaches of competition law.
Opt-out means all those affected by the alleged anti-competitive behaviour will automatically be included in the claim unless they actively state, in advance, that they don’t want to be.
Opt-in, on the other hand, involves a number of individuals bringing claims that are then heard together in court as a single group, called a Group Litigation Order.
Alan Davis, of law firm Pinsent Masons, said: “Opt-out class actions in competition cases have been on the rise since the landmark Merricks Supreme Court judgement in late 2020 [in which it was ruled that Mastercard had breached competition law by charging excessively high interchange fees].
“In 2021, the UK’s Competition Appeal Tribunal (CAT) certified three opt-out mass actions involving payment card interchange fees, one involving landline telephone services, and two related claims involving train fares.”
Six further mass actions were certified in 2022, including one opt-in action, while one has been certified so far in 2023. More than a dozen other cases are currently before the CAT and the High Court hoping to be certified, while some certification decisions are being appealed.
So will I get my money back?
With a growing pipeline of upcoming cases chasing compensation for victims who have lost out at the hands of major firms, it can be tricky keeping on top of things.
Last month, a new free-to-use website called Consumer Voice, launched with the aim of making it easier for those affected to track the progress of current claims.
Alex Neill, co-founder of Consumer Voice, said: “Many people have little or no awareness of group claims as a route to compensation. We want to help people get back money they are owed from rule-breaking businesses.
“People should be confident that when they join a claim, they are not being scammed – and that it won’t be a painful process.”
She added that while action by regulators to punish companies that break the law is important, it doesn’t result in money going back to people who have lost out and paid higher prices.
“That’s why these group actions are so critical for consumers,” she said
However, you shouldn’t bank on getting the cash, as firms will usually do their utmost to contest the claims and fight back.
Up to 46 million shoppers could potentially get a payout if a landmark £10bn case against Mastercard is successful.
This hotly contested case – the biggest consumer claim in UK legal history – is being led by solicitor and former financial services ombudsman, Walter Merricks.
He began his class action in 2016, arguing that consumers paid higher prices for goods due to the fees merchants were charged by Mastercard from 1992 to 2008.
Mr Merricks said: “Mastercard charged billions of pounds of unlawfully high fees for its sole benefit and to the detriment of consumers.”
As this is an opt-out claim, you don’t need to do anything to be eligible for compensation if Merricks is successful. You are automatically included if you were an adult living in the UK for at least three months between 1992 and 2008, and you purchased goods and services from retailers who accepted Mastercard.
A spokesman for Mastercard said: “This flawed claim isn’t about helping UK consumers. It’s being pushed by lawyers and their financial backers trying to make money for themselves. We’ll continue to fight it and are confident it will be thrown out.”
How much could I get?
Initially it was suggested shoppers could get payouts of £300. However, following a number of related court rulings the claim figure has been reduced to £10bn, which would mean smaller payouts. Plus, Mastercard believes the case will ultimately not succeed.
In another big case, which alleges that 2.3 million residential landline customers were overcharged by BT, payouts of up to £500 could be up for grabs if collective proceedings are a success.
The £600m compensation claim is being brought by Justin Le Patourel, who has instructed the law firm Mishcon de Reya to advance the claim.
If you were a BT landline customer between October 2015 and April 2018 but did not take a BT broadband service, or if you had a BT landline and broadband separately (not a bundle) from October 2015 until today, you could be eligible.
Meet the criteria, and you’re automatically included in this claim as it’s being brought on an opt-out basis.
Mr Le Patourel believes more than two million elderly and vulnerable customers have been paying over the odds.
He said: “Ofcom made it very clear that BT had spent years overcharging landline customers, but did not order it to repay the money it made from this. We think millions could be entitled to compensation.”
A spokesman for BT said: “We strongly disagree with the speculative claim being brought against us. We take our responsibilities to customers very seriously and will defend ourselves against any claim that suggests otherwise.”
How much could I get?
If the court rules in Mr Le Patourel’s favour, consumers could get estimated payouts of between £200 and £500.
Apple and Samsung smartphones
Millions of Apple and Samsung 4G smartphone users who bought a new smartphone after October 2015 could be in line for compensation from global chip-maker, Qualcomm.
Consumer group Which? alleges the company abused its position and charged manufacturers inflated fees to use its technology. This, in turn, led to consumers paying higher prices for phones, it says.
Lisa Webb, consumer law expert at Which?, said: “We are bringing this claim on behalf of millions of consumers so that, if successful, they can get back nearly £500m we believe they are owed by Qualcomm.
“We wouldn’t be taking this action unless we thought it had a strong chance of succeeding. If Qualcomm has abused its market power, it must be held to account.”
She added that it would not have been realistic for people to seek damages from the company on an individual basis. Ms Webb said: “That’s why it’s vital consumers can come together and claim the redress they are entitled to.”
The claim by Which? will go ahead on an opt-out basis, meaning anyone who bought new Apple or Samsung smartphones since October 2015 is automatically included.
Qualcomm has been approached for comment.
How much could I get?
Between £5 and £30.
More than three million passengers who travel in and out of London on certain rail routes could be in line for compensation, as the operators have been accused of overcharging rail users.
Justin Gutmann, a consumer rail campaigner, is representing those affected in two lawsuits that are being dealt with together. He has instructed the law firms Charles Lyndon and Hausfeld & Co LLP to represent him.
The first is worth £73.3m, involving Govia Thameslink Railway Limited, Govia Limited, The Go-Ahead Group plc and Keolis UK Limited, which operate Great Northern, Southern, Gatwick Express and Thameslink routes.
The second is a £93m lawsuit involving First MTR South Western Trains Limited, Stagecoach South Western Trains Limited and London & South Eastern Railway Limited, which run the Southeastern and South Western rail franchises.
Mr Gutmann is alleging the companies did not make boundary fares sufficiently available for Travelcard holders to buy, meaning many paid a higher fare than necessary.
He said: “Passengers in London already pay a lot of money for trains that are often delayed or don’t even run. Now, following extensive research, we have found some passengers are paying twice for parts of their journeys.”
You could be eligible for compensation if you owned a TfL Travelcard from October 2015, and bought a rail fare from a station within the zones of your card to a destination outside the zones.
This opt-out class action is being contested by the rail firms.
A spokesman for South Western Railway, said: “We are committed to providing customers with the best range of fare and ticketing options – including online, via mobile phones and in person.
“We believe all the ticket options available are in line with legal and regulatory requirements, and we will continue to robustly defend our position in this case.”
A spokesman for Go-Ahead, the company that owns GTR, added: “We consider this claim to be flawed, and we dispute the allegations within it. We will be defending our position robustly.”
How much could I get?
Up to £55.
Sony PlayStation users
If you’re a Sony PlayStation customer, you could be owed hundreds of pounds in compensation.
Alex Neill, from Consumer Voice, is leading a claim against Sony on behalf of 8.9 million customers who, it is alleged, may have overpaid for games and in-app purchases via the PlayStation store. A £5bn group claim has been submitted to the courts.
You could be eligible if you currently own or have owned a PS4 or PS5 any time from August 2016 onwards, and spent money buying games or in-app purchases.
A complaint was lodged by Ms Neill at the CAT in August last year. She is awaiting approval from the court to bring this claim.
Sony PlayStation has been approached for comment.
How much could I get?
Between £60 and £560.
More than 90,000 drivers are set to get payouts of over £2,000 from Volkswagen after it settled a High Court claim over the installation of software in its cars to manipulate pollution data on tests.
The claim was brought on an opt-in basis by a group of consumers in the UK, and had been due to go to trial in January this year.
When it settled in May last year, the German carmaker said it had made no admission of liability, but described a settlement as the “most prudent course of action commercially”.
VW will pay out a total of £193m.
How much could those who had signed up have got?
Just over £2,000.