Supreme Court overturns opt-out ruling in FX class action

The UK Supreme Court has unanimously allowed an appeal by the defendant banks in the foreign exchange (FX) collective action by endorsing a judgment of the Competition Appeal Tribunal (CAT) to certify Mr Evans' claim as an opt-in action.

What you need to know

• The judgment clarifies the test that the CAT applies when certifying collective actions on an opt-out basis. Notably, the Supreme Court endorsed the CAT's decision to regard the weakness of the claim as a material factor in refusing to certify it on an opt-out basis.
• The Supreme Court provided additional guidance on how the concept of "practicability" should be approached when assessing whether a claim should be brought as opt-in action.
• The Supreme Court has clarified that evidence obtained in earlier proceedings or regulatory findings concerning different parties will generally be inadmissible in subsequent proceedings before the CAT.

On 18 December 2025, the Supreme Court handed down its long-awaited judgment in the collective action between Mr Philip Evans (the Class Representative) and a series of banks (the Defendants) concerning allegedly anticompetitive conduct in relation to FX trading markets.

Background

Following a certification hearing in 2021, the CAT certified the proceedings on an opt-in basis due to two factors:

• the overall weakness of the claim (such that it was liable to be struck out); and
• the relative practicability of conducting opt-in proceedings, given that the majority of the claim value lay in a relatively small number of large sophisticated class members' claims.

The Class Representative successfully appealed the CAT's judgment before the Court of Appeal, seeking certification on an opt-out basis. The Court allowed the appeal, finding that:

• the CAT incorrectly concluded that the weakness of the Class Representative's case militated in favour of certifying the claim on an opt-in basis;
• the CAT should have given more weight to the fact that the proceedings were practically unlikely to proceed on an opt-in basis as a factor for certifying the claim on an opt-out basis; and
• the existence of new information (arising after the certification hearing) from a subsequent European Commission Infringement Decision in relation to another group chat in which further price manipulation was found to have existed among different parties than those in the Evans litigation was admissible.

The Defendants appealed the Court of Appeal's judgment to the Supreme Court.

The Supreme Court's judgment

Strength of claim as a factor for opt-in/opt-out: The Supreme Court held that the CAT was correct to regard the weakness of the Class Representative's claim as a determining factor in certifying the claim on an opt-in basis (applying Rule 79(3)(a) of the CAT Rules 2015). The Supreme Court therefore overturned the Court of Appeal's finding that the merits of the claim stood as a "neutral" factor in deciding to certify a claim on an opt-in or opt-out basis.

The Supreme Court agreed with the CAT's doubts as to the viability of the claim. It found that, while the claim was a follow-on claim based on the European Commission's findings in its FX Decisions in 2019, the Class Representative's pleaded class definition was so broad that it gave rise to material causation concerns. While the CAT stopped short of unilaterally striking out the claim at the certification stage, the Supreme Court considered that it was "perhaps generous" in doing so. Recalling the minority judgment in Merricks, the Supreme Court reasoned that the leveraging advantage of opt-out collective proceedings (that opt-out claims represent a significant burden for defendants caused by the high cost of defending them, such that early settlement may be incentivised, regardless of the claim's strength) should not be extended to very weak claims.

Practicability of opt-in as a factor for certification: The Supreme Court endorsed the CAT's finding that, pursuant to CAT Rule 79(3)(b), the claim should proceed on an opt-in basis because the case's facts meant that it was practicable to do so. The Class Representative's class definition was such that a relatively small number of large sophisticated class members represented the majority of the claim's value. This led the CAT to conclude (and the Supreme Court to agree) that those class members were capable of considering whether or not to opt-in to collective proceedings themselves. The Supreme Court agreed with the CAT that the large sophisticated class members' apparent lack of engagement with bookbuilding attempts by the Class Representative and his solicitors reflected a lack of interest rather than a lack of ability to consider their position.

Admissibility of intervening evidence: the Supreme Court found that information contained in the subsequent European Commission Decision was inadmissible, following the general rule in Hollington v Hewthorn that findings of fact in another case by a different decision-maker are not admissible as evidence in a subsequent case involving different parties.

Implications

The Supreme Court's judgment marks a shift from previous more permissive rulings of the Court of Appeal in Le Patourel v BT and Gutmann v Apple, which were allowed to proceed on an opt-out basis.

Once again, the Supreme Court has emphasised the importance of the CAT's gatekeeper role, and given it considerable latitude (as a specialist decision-maker) when determining questions of certification, including in relation to opt-in / out issues. As the collective proceedings regime begins to mature, this judgment is likely to contribute to a gradual cooling of Court of Appeal intervention in fact sensitive matters such as certification.

The Supreme Court has also clarified the role of merits in considering whether or not to certify a claim, and if so on what basis. It recalled the minority judgment given by Lord Sales and Lord Leggatt in Merricks, which referred to opt-out collective proceedings as providing a potent means of achieving access to justice for consumers but also their potential of "being misused", as well as their "leveraging effect", stating that the CAT should be slow to extend this leverage to very weak claims. The Supreme Court took care to add that there was nothing in the majority judgment in Merricks that was inconsistent with this specific point.

With this reasoning, the Supreme Court has maintained the basic principle laid down in Merricks that certification is not a "mini-trial", but clarified that does not mean that merits should be ignored when approaching certification. If the Merricks decision was widely regarded as lowering the threshold for certification, this latest judgment from the Supreme Court clarifies that it was perhaps never quite as low as some have perceived.