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Compare the Market Inflated Insurance Prices Class Action Overview:
- Who: Price comparison website Compare the Market is being sued by insurance consumers after being hit with a £18M fine from the UK’s Competition and Markets Authority (CMA).
- Why: Compare the Market is accused of artificially pushing up home insurance prices for consumers through its contracts with certain insurers.
- Where: The website sells insurance to customers in the UK.
Compare the Market, a popular UK price comparison website has been hit with a class action lawsuit seeking refunds on behalf of more than 20 million home insurance consumers. News of the legal action comes on the very same day the website’s parent company vowed to fight a £17.9 million fine handed down to it by the UK’s competition watchdog.
On Nov. 1, a law firm reportedly announced it had filed a class action lawsuit against CompareTheMarket.com, alleging the company breached competition law in relation to its contracts with certain insurers listed on its website.
The class action was filed the same day Compare the Market announced its plans to fight a £17.9 million fine handed down to it from the UK’s Competition and Markets Authority (CMA).
Compare the Market Website Facing Class Action on Top of £17.9M Fine
The CMA slapped Compare the Market with the fine in 2020, saying the price comparison website had kept home insurance prices artificially high for consumers by creating contracts with insurers that did not allow those insurers to offer better prices on other websites.
These contract terms are called “most favored nation clauses”—contract provisions that require that a party must receive rights and benefits under the contract that are equal to or more favorable than the rights and benefits received by any other parties.
In this case, Compare the Market signed contracts with 32 home insurance providers that blocked them from offering lower prices on other price comparison websites, the CMA says.
The Nov. 1 class action is based on the CMA findings, the law firm initiating the lawsuit said in a press release. It is representing plaintiff Home Insurance Consumer Action—an entity established to sue Compare the Market.
The lawsuit claims ComparetheMarket’s conduct caused all purchasers of home insurance to overpay for their policies.
Home Insurance Consumer Action Director Kate Wellington said, instead of helping consumers, Compare the Market hurt them.
“I am determined that consumers who have overpaid should be refunded and I’m delighted to be leading this claim.”
The lawsuit says it is likely all purchases of home insurance, including renewals, made between Oct. 1 2015 and June 1 2020 were affected by Compare the Market’s conduct.
Do you think the contracts Compare the Market had with insurance companies could have kept insurance premiums artificially high? Let us know in the comments!
The plaintiff is represented by Hausfeld & Co. LLP and Josh Holmes QC of Monckton Chambers, Tristan Jones of Blackstone Chambers, Ciar McAndrew of Monckton Chambers, and Antonia.
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