On 18 December 2025, the UK Supreme Court handed down its decision in Evans (Respondent) v Barclays Bank Plc and others (Appellants) [2025] UKSC 48, overturning the Court of Appeal. In doing so, it reinstated the Competition Appeal Tribunal’s (“CAT”) decision to certify a collective action - brought against a group of major banks (the “Banks”) by class representative, Mr Evans, in respect of alleged anti-competitive practices in FX trading - on an opt-in basis, rather than the requested opt-out basis.

The opt-out case had been valued in the region of £2.7bn so this decision significantly reduces the value of the claim. 

Background

In opt-in collective proceedings, the class representative may only pursue claims on behalf of class members who opt in to join the proceedings. In opt-out collective proceedings, the class representative may pursue claims on behalf of the whole class affected by the alleged conduct except for any member who expressly opts out of such proceedings. Where large volumes of claimants are affected by an issue but each has only modest losses, the difference between opt-in and opt-out proceedings can lead to very different outcomes in terms of the size, complexity and cost of pursuing / defending the litigation. This combination of potential high aggregate damages and procedural leverage typically exerts strong pressure on defendants to settle early, even when they believe they have a robust defence.

In 2022, the CAT refused to certify the claim on an opt-out basis, finding that the case was inadequately pleaded and the merits too weak to justify collective redress without individual participation, such that it could only proceed on an opt-in basis. 

However, the Court of Appeal ruled in July 2023 that the CAT was wrong about the opt-in versus opt-out question and had failed to adequately justify its preference for opt-in proceedings. The Court of Appeal also held that the CAT had prematurely assessed the strength of the claims when weighting this in the context of the procedural question. As a consequence, the CPO was amended so that the action could proceed on an opt-out basis.

The Banks appealed the Court of Appeal decision to the Supreme Court arguing that the CAT is the primary authority for determining the certification of collective actions and that allowing the opt-out process would undermine safeguards intended to prevent excessive litigation.

Supreme Court Decision

The Supreme Court allowed the appeal and determined that the collective proceedings could not be brought on an opt-out basis.

The Supreme Court referred to its findings in Merricks v Mastercard Inc [2020] UKSC 51, that merits should not be considered in the first instance when deciding whether to allow a collective action, as this could be contrary to the principle of access to justice. 

However, the Supreme Court confirmed that the CAT was correct to assess the merits of the claim as a factor in deciding whether to certify a collective action on an opt-out or on an opt-in basis. This aligns with Rule 79(3)(a) of the Competition Appeal Tribunal Rules 2015 which specifically identifies the strength of the claim as a factor relevant to the choice between opt-in and opt-out proceedings.

The Supreme Court recognised that the weakness of the claim was a factor pointing against opt-out proceedings and that such proceedings would present excessive litigation as it would be administratively cumbersome, costly to litigate and would likely take significant time. 

The Supreme Court also discussed other factors relevant to this issue unrelated to the merits test.  One other factor of note for the purpose of this update was the question whether it was practicable for the claimant group to proceed on an opt-in basis.  The evidence submitted to the CAT on this question was that the claimant group would be unlikely to purse the claims on an opt-in basis.  The Supreme Court determined that this was a matter of choice and did not mean that it was impracticable as a procedure available to the claimants.  The Supreme Court considered that it was practicable for proceedings to be brought on an opt-in basis given that the claims concerned sophisticated financial institutions. 

What does this mean for Insurers?

The decision to reinstate the CAT’s decision was widely anticipated in the market and reinforces the high threshold for certifying opt-out collective actions before the CAT, which will be welcomed by financial institutions and their insurers.

The decision is consistent with the general trend in England and Wales of the courts keeping under close control any procedural mechanism that could be misused in the pursuit of frivolous claims. For financial institutions this presents a positive risk environment where traditional risks can be managed, mitigated and measured. Emerging risks, such as the use of the CAT to bring claims which might previously have been pursued in the High Court, or multi-party litigation by shareholders under FSMA, are slower to develop than in other jurisdictions.  Whilst this might mean the frequency of claims is slower to increase, it does not alleviate the difficulties in assessing the severity of claims. 

It is interesting that this trend specifically informs part of the reasoning in the Supreme Court.  When considering the factors relevant to determining whether collective proceedings should proceed on an opt-in or opt-out basis, the Supreme Court identified the potential significantly increased exposure to defence costs and the potential increased settlement value of claims as a factor weighing against permitting the claim to proceed on an opt-out basis. 

The Supreme Court was concerned not to permit unmeritorious claims to proceed on an opt-out basis because it placed a burden on the defendant community to settle claims they were otherwise confident they would defeat, because of the time, cost and complexity of defending such claims.