Class representative Justin Gutmann’s proposed opt-out collective proceedings claim at the Competition Appeal Tribunal (CAT), which he estimates to be worth £853m, alleges that Apple Inc and other Apple companies exploited its dominant market position by failing to respond fairly to iPhone battery issues which shut the phones down unexpectedly. Gutmann claims Apple encouraged consumers to install iOS updates which slowed the phones down instead of being upfront about the issues.
His claim asserts more than 23 million UK iPhone users may be eligible for compensation.
Apple argued the CAT did not have jurisdiction to order the litigation funder’s fee be paid from damages awarded in priority to the class, and that the litigation funding agreement created perverse incentives by requiring the class representative to argue against the interests of the class he represents in favour of paying extraordinary sums to the funder.
The court did not deal with a third ground of appeal, which relates to the decision in R (on the application of Paccar Inc and others v Competition Appeal Tribunal [2023] UKSC 28 on third-party funding.
Giving the main judgment in Gutmann v Apple Inc and others [2025] EWCA Civ 459, however, Sir Julian Flaux said he was unable to accept the ‘ingenious’ but ‘misconceived’ arguments.
‘Payment of the funder’s return and lawyers’ fees from the award of damages in priority to payment to the class is clearly permitted under [the Competition Act 1998],’ he said.
The Act ‘does not prescribe what the class representative does with the damages once received and accordingly it would be open to him to pay the funder and the lawyers, subject always to the control of the CAT under its supervisory jurisdiction.’
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