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Royal Mail faces $1.1 billion claim

Royal Mail faces $1.1 billion claim
Royal Mail faces $1.1 billion claim

A claim on behalf of Bulk Mail Claim Limited (BMCL) has been filed against Royal Mail for £878m ($1.113 billion). This follows a class action filed by 290,000 of its members, claiming they were overcharged.

Andrew Wanambwa, partner in the dispute resolution team at law firm Lewis Silkin, commented: “Royal Mail abused its dominant position, resulting in hundreds of thousands of bulk mail customers being overcharged. The purpose of this claim is to hold Royal Mail accountable for its actions and secure compensation for affected customers.”

What is the proposed claim? The claim seeks damages for Royal Mail breaking competition law. It represents everyone who bought or paid for certain bulk mail services since January 10, 2014.

The claim seeks to bring compensation for the overcharge. 

Why is a collective claim necessary?

Class representative’s perspective

Robin Aaronson of Bulk Mail Claim Limited, the proposed class representative, emphasizes the importance of redress for those affected by abuse of power: “Where there has been an abuse of dominant position, as has occurred in this case, it is important that those suffering loss are able to obtain redress.”

Efficiency and fairness of collective claims

He further explains the necessity of a collective approach: “A collective claim is the only fair and efficient form of redress in this case, given that there are hundreds of thousands of affected customers and it would be commercially unviable for them to bring individual proceedings.”

Next steps? A hearing will be held by the Competition Appeal Tribunal to determine next steps in the claim. 

This legal challenge comes within a month of the Royal Mail’s agreement with Czech billionaire Daniel Křetínský to acquire the postal service for $4.5 billion. 

Royal Mail’s rocky waters 

The UK’s regulatory body for postal industries, Ofcom, proposed an investigation into Royal Mail’s performance. The Royal Mail failed to meet delivery targets, which dropped by nearly 20% compared to last year.

The postal company was previously also slapped with a fine to the tune of $6 million for failing to meet first and second-class delivery targets in the 2022/23 financial year.

NOW READ: DEVELOPING: Business sector reacts to Royal Mail acquisition

Photo Credit: Canva

About the author

Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.

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