The high street chain JJB Sports is to pay compensation to shoppers for the “rip-off” prices of replica England and Manchester United football shirts.

In what is seen as the first example of American-style consumer justice in Britain, 1,000 people who joined the test case brought by Which?, the consumer watchdog, will each receive £20 from the company.

Lawyers are now looking for similar cases that would result in compensation for customers. The move could bring down the price of football shirts across the country. The £20 compensation is half the price of an adult-size shirt in 2000 and 2001. However, almost one million “rip-off” shirts went on sale, and anyone else who bought one will be eligible for a £10 refund. The deal is open until February 5 next year. The refund can be claimed by taking the shirt or proof of purchase to a branch of JJB Sports. Shirts without a label will qualify for £5.

The shirts are:

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— England white home shirts 1999-2001

— England red away shirts 1999-2001

— Manchester United reversible white/gold centenary shirt 2000-01

Manchester United red home shirt 2000-01 2001-02 The case could now lead to further legal action seeking redress for consumers. The price fixing of milk by supermar-kets and fuel surcharges introduced by Virgin and BA for transatlantic passengers are possible cases.

Lawyers at Which? are awaiting the publication of the Office of Fair Trading (OFT) infringement decisions in both cases before deciding whether to proceed. Deborah Prince, head of its legal unit, said: “The agreement reached with JJB Sports is a good deal for the hundreds of consumers who purchased football shirts and joined our case against JJB.”

Ms Prince also called on other companies caught out in price-rigging scandals to compensate consumers. She said: “Corporate responsibility is the buzzword in every boardroom the length and breadth of Britain. Well, I say come on, when you’ve been found out and admitted price fixing then do the right thing and compensate your customers.”

Asda has been leading a campaign on the price of football shirts. The company is now hoping that the cost of replica shirts will fall. A spokesman said: “This is good news for football fans, although we think there is still some way to go. Fans are not getting a fair price.”

The company has a petition on its website calling for cheaper shirts. It has been signed by more than 20,000 customers. It coincided with Asda’s deal with the kit manufacturer Diadora to sell the Scotland shirt for £29, £10 less than other shops.

JJB Sports has agreed to pay a total of £20,000 to the 1,000 customers who were represented by Which?. The company stands to lose hundreds of thousands of pounds if everyone overcharged for a shirt seeks the £10 refund.

The shirts went on sale with prices fixed by a cartel that included Allsports, Blacks Leisure Group, Manchester United, Sports Soccer, JD Sports and Umbro Holdings. They have paid more than £16 million in fines to the Treasury.

The OFT proved that price fixing had taken place between 2000 and 2001. JJB Sports has already paid £6.7 million in fines. Under the terms of the deal, however, the company must also pay consumers who bought shirts from the other companies in the cartel. All payments will be made by cheque and not cash paid over the counter.

Which? brought the legal action at the Competition Appeals Tribunal last March. It has taken months to resolve because of the difficulty in agreeing the compensation sum. The deal was agreed in an out-of-court settlement.

This is the first time that the watchdog has used new powers under the Enterprise Act 2002 that allow it to bring a class action against a company that has been convicted of price fixing or other anticompetitive practice.

Which? said that JJB Sports had also agreed to pay reasonable legal costs of the case.

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