BT has successfully defended a £1.3 billion class action over allegations it “disproportionately overcharged” its landline customers.

In a judgment released on Thursday, the Competition Appeal Tribunal (CAT) found the claim against BT failed after deeming that “overall” prices it charged “were not unfair, and therefore there was no abuse of dominant position”.

Collective Action on Land Lines (Call) founder Justin Le Patourel had sought between £300 and £400 in compensation for more than three million customers, depending on the length of their contract.

The ruling means BT does not have to pay out any compensation.

We take our responsibilities to all of our customers very seriously and welcome today's ruling

In 2017, watchdog Ofcom said that BT had unfairly charged millions of landline customers from 2015 after an investigation.

At the time, BT agreed to reduce the price of its landlines.

However, Mr Le Patourel took the issue to the CAT as he believed the telecoms provider owed compensation payments, arguing that many customers were vulnerable and were owed refunds.

A BT spokesman said: “Today the Competition Appeal Tribunal handed down its judgment in the case of Justin Le Patourel v BT Group plc in which the CAT has dismissed the claim and found that BT Group’s conduct did not breach competition law.

“We take our responsibilities to all of our customers very seriously and welcome today’s ruling.”

Mr Le Patourel said: “While I am pleased that the Tribunal has recognised BT’s dominant position in the market, and the significant and persistent nature of its excessive pricing, I am disappointed that it did not agree that these prices were unfair.

“This means we cannot now compensate many of BT’s most loyal but mistreated landline customers for the overcharging that took place.

“However, we are carefully considering the Tribunal’s decision and whether the next step will be an appeal to the Court of Appeal to challenge this verdict.”

Mr Le Patourel’s adviser Sarah Houghton, a partner at law firm Mishcon de Reya, said: “As the first collective proceedings tried since the Consumer Rights Act 2015 introduced the regime in the UK, this is a watershed moment in the development of the collective proceeding regime in that it is the first judgment of its kind.

“We are grateful to the Tribunal for the time spent hearing and considering the evidence. However, we are disappointed that the Tribunal did not agree that the excessive prices charged by BT were unfair in terms of amounting to a breach of competition law.

“Mr Le Patourel is a passionate advocate for BT’s loyal customers and is carefully considering with his team of advisers what the next steps should be.”