Opt-In or Opt-Out? Raising the Bar for Class Action Certification

At a Glance

• Overall, the Supreme Court upheld the appeal, reiterating the CAT’s gatekeeping function as a specialist tribunal, in a ruling that is welcome news for corporate defendants.
• To curtail the use of opt-out proceedings as a means of leveraging settlement in weak and frivolous claims, claimant firms will need to put forward an arguable case and demonstrate that opt-in proceedings are not a practicable alternative for the class they purport to represent.

On 18 December 2025, the UK Supreme Court handed down its judgment in the case of Evans v Barclays Bank plc & Ors [2025] UKSC 48, with significant implications for the future of collective proceedings in the United Kingdom. Overturning the Court of Appeal’s decision, the Supreme Court emphasised the importance of the Competition Appeal Tribunal (CAT) exercising its discretion as a specialist body and clarified the relevant factors to consider when deciding whether opt-in or opt-out proceedings are more appropriate.

Background

In 2019, Mr Evans sought permission to bring opt-out collective proceedings against several major banks, including Barclays, seeking damages as part of a ‘follow-on’ claim for anticompetitive infringements relating to foreign exchange trading. The main issue in contention was the mechanism by which the collective action would proceed — specifically, whether the claims should be certified on an opt-in or opt-out basis.

CAT Decision — 31 March 2023

The CAT considered Mr Evans’ application for opt-out certification, referring to section 79(3) of the CAT Rules 2015, which identifies the merits of the case and the practicability of opt-in proceedings as relevant factors. It concluded that Mr Evans failed to articulate a plausible case on causation, potentially justifying strike-out, and determined that opt-in proceedings were practicable for the sophisticated institutional class members, whose losses accounted for a majority of the claim’s value. On this basis, the CAT refused opt-out certification.

Court of Appeal Decision — 9 May 2024

The Court of Appeal overturned the CAT’s judgment, rejecting the emphasis placed by the CAT on its assessment of the merits of the case. The Court of Appeal gave more weight to the fact that opt-in proceedings were unlikely to occur, stating that access to justice considerations were relevant to the assessment of practicability including all members of the class irrespective of their size and sophistication, not solely for consumers and Small and Medium Enterprises (SMEs). The cost of opt-in proceedings and the practical burdens associated with opting in would likely exceed the sums at stake for most of the class members, thereby limiting the practicability of opt-in proceedings and favouring opt-out certification. Accordingly, it set aside the CAT’s decision and remitted the case, prompting an appeal from the banks to the Supreme Court.

Supreme Court Decision — 18 December 2025

The Supreme Court examined the decision to intervene with the CAT’s reasoning and disagreed with the Court of Appeal, overall reaffirming the CAT’s ability to exercise discretion as a specialist tribunal.

1. Merits of the Claims

Firstly, the Supreme Court agreed that the strength of Mr Evans’ claim was an important factor, as section 79(3)(a) of the CAT Rules expressly identifies. It also observed that opt-out proceedings legally and commercially favour claimants, as the procedure enables the representation of a larger class. This often results in higher value claims and increased costs for corporate defendants, which may be leveraged to advance weak and frivolous claims. To preserve the balance between access to justice for claimants and protection for corporates against oppressive litigation, the courts should not allow weaker claims to proceed on an opt-out basis. The Supreme Court therefore held that the Court of Appeal had no basis for interfering with the CAT’s decision.

2. Practicability of Opt-In Proceedings

On the issue of practicability, the CAT was correct to divide the class into subclasses. The potential claimants ranged from sophisticated commercial entities and financial institutions to individuals and smaller entities. The CAT gave foremost attention to the sophisticated entities who accounted for most of the value of the claim. Those institutions were capable of pursuing litigation on an opt-in basis but had made a conscious and deliberate decision not to do so. Opt-out certification should not be used as an alternative route in cases where opt-in proceedings fail to generate sufficient interest. The CAT exercised its discretion to divide the class and came to a reasoned decision, and there was no basis for the Court of Appeal to interfere.

3. Neutral Starting Point

The Court of Appeal adopted a starting position in favour of opt-out proceedings, taking the view that it must uphold principles of vindicating rights and deterring future wrongdoers as powerful factors favouring certification. However, the Supreme Court disagreed, confirming that judicial decision-makers must adopt a position of neutrality with no presumption in favour of either procedure when determining certification. The Supreme Court held the CAT was correct to adopt an even-handed approach, weighing factors on both sides to strike a balance between competing interests, and to exercise its judgment as a specialist tribunal without interference from the appellate courts in the absence of an error of law.

A More Exacting Certification Process

Overall, the Supreme Court upheld the appeal and reiterated the CAT’s gatekeeping function as a specialist tribunal, in a ruling that is welcome news for corporate defendants. As identified in the October 2025 report we published in conjunction with Kendal Global Advisory, businesses have reported increased liability risk and exposure to damages resulting from the strategic utilisation of the collective redress regime by claimant firms, as well as concerns that claimant interests are not at the forefront of such actions. This decision — one amongst a number of recent appellate court judgments shaping the collective and class actions landscape — raises the threshold for opt-out certification and reflects the court’s increasing attentiveness to the practical and procedural realities of such large-scale litigation.

To curtail the use of opt-out proceedings as a means of leveraging settlement in weak and frivolous claims, claimant firms will need to put forward an arguable case and demonstrate that opt-in proceedings are not a practicable alternative for the class they purport to represent.