A consumer milestone was laid on January 9, when Which?, the consumer group, reported that its landmark case against the retailer JJB Sports had been settled out of court. This was the first “representative action” under the Enterprise Act 2002 - where Which?, at its own risk, acts on behalf of people who have fallen victim to price fixing.

The case was resolved in 11 months. Which? had wanted redress for the one million customers affected after the Office of Fair Trading (OFT) fined JJB £6.7 million for fixing the prices of replica England and Manchester United football shirts in 2000 and 2001. Despite wide press coverage, only 130 claimants signed up to the action by completing an online form at which.co.uk. Under the settlement, each claimant wins only £20 - the estimated illegal mark-up.

Nevertheless, Which? and the OFT claim a crucial victory because the payout was on target. And last week the European Commission called for more cases on the same lines, stating that price fixing is costing EU citizens several billion euros a year.

Chris Warner, of the legal department at Which?, says that the action was significant because there was no alternative means of redress. Mr Warner explains: “JJB had been fined for price fixing but, strange as it seems, that money does not go back to the consumer. Without these actions, big companies know that they can get away with being that little bit bad.”

Another case attracting the interest of Which? is the price fixing of dairy products by a number of supermarkets, including Sainsbury's and Asda, in 2002 and 2003. This put an estimated 3p on the price of a pint of milk and 15p on a quarter of a pound of butter, costing shoppers more than £116 million. However, the consumer group cannot act until the OFT makes a final ruling.

Which? is using the lull to highlight weaknesses in the current legislation. The biggest, it says, is that representative actions use an opt-in model, where consumers must put their name to the action to qualify for a payout. In the US, class actions are opt-out cases, with consumers included by default unless they say otherwise. Mr Warner adds: “The problem with opt-in is that people want redress but are wary of getting involved in a legal process when the sums are small.”

The OFT shares this view and has described the opt-out model as its “preferred option”.

While lawyers emphasise that the JJB case was a representative action rather than a class action, the distinction is one of language - both types of action harness the experiences of a few people to seek redress for others in their position, or “class” - and the case is viewed widely as a move towards a class-action culture.

In the US the system is a cash cow for lawyers and has been criticised for its excesses. But Mr Warner says: “What we want is an American system-plus, building on their model's strengths.”

Beyond the opt-in/opt-out split, there are several differences between American class actions and cases such as JJB's. First, these representative actions can be launched only where a company has already been fined for a breach of competition law. A class action can be launched on a number of grounds.

Moreover, representative actions depend on the participation of the “representative” and, so far, only Which? has been authorised by the Secretary of State to act. The OFT has suggested that any private body should be able to step in on behalf of consumers after a filtering permission stage.

The status of Which? as sole intermediary is controversial. A reader, Ben, of London, for example, commented at Times Online: “This is a step in the right direction, but is much weaker than the legal tools available in the US. Why are British consumers not able to band together and demand compensation from companies that have wronged them without Which? giving its support? If high street banks, for example, knew that they could face costly class actions, they would probably reconsider some of the ways that they do business.”

Mr Warner says that Which? is happy to take on the role of gobetween but would like other organisations to work in the same capacity. “We would like to see other bodies allowed to get involved in their own areas. If older people had lost out, for instance, Age Concern could help.”

He adds that changes to the system, enabling representative actions on issues other than price fixing, are on the horizon. But while such radical change would not happen in the short term, Mr Warner expects action on OFT recommendations within the next few years.

In the meantime, customers who have been ripped off without price fixing can take on companies in a collective action where they act for themselves as a group rather than a wider class, but do so at their own risk. A current case is the action brought by 50 landlords against their letting agent, The Property Bureau, which failed to pass on £500,000 in rent. Neil Curbison, of Colman Coyle, the firm of solictors co-ordinating the action, says: “The customers could not afford to sue in separate cases, so they have teamed up to keep costs, and risk, affordable.”

A much larger high-profile collective action by 49,000 Railtrack shareholders against the Government was defeated in 2005, making its members liable for the other party's costs of £2 million, almost £41 each.

Before you take legal action

- As they can be used only where a company has been fined for price fixing, representative actions currently have limited scope. If you have a more general grievance, there are a number of steps to go through before involving the law. Here is Times Money's mini-guide.

- Know your rights. Read about consumer rights at specialist websites such as which.co.uk.

- Act fast. Basic consumer complaints must be made within a “reasonable time”. This means that you should complain as soon as you realise that there is a problem.

- Put it in writing. An initial approach by telephone or in person is fine, but write a letter if this does not achieve immediate results. This should contain specifics, such as the date when you bought a faulty item, and copies of receipts. Keep copies of correspondence.

- Escalate. If your letter does not produce redress, contact the relevant trade association or regulatory body. These are listed at howtocomplain.com. Staff may take up the matter or direct you to a dispute resolution service or ombudsman.

- Seek help. If you are still stuck, contact Trading Standards or Citizens Advice for free guidance.

- Take action. If all else fails, Community Legal Advice and Citizens Advice advise on litigation.

Case Study - No need to get shirty after £60 payout

Jane Reid, of Dulwich, South London, thought that the £120 she paid for three football shirts at JJB Sports for her son, Jack, in 2001 was steep, but shrugged it off. She says: “He is passionate about football and I bought him two Manchester United shirts and an England shirt.”

Nevertheless, Mrs Reid, pictured with Jack, was not surprised when she read that the prices had been fixed. “I thought, OK, it's just another rip-off,” she says. “I only learnt about the Which? action months later. At first, I assumed that I would not be able to take part because I had lost the receipts.”

After reading more about the case, she realised that she might be able to take part without the receipts and e-mailed Which? She explains: “I was told that the shirt itself was good enough for evidence. To take part, I just had to send some basic details and my signature. The process was easy. I wasn't sure that it would achieve much, so I was delighted when I received a £60 cheque last month.”

Mrs Reid says that the case sends an important message to companies: “Without these cases, the law is ridiculous - companies can be fined for ripping us off but they don't have to pay compensation. They would not do it if there were more actions like this.”

She says that she will be interested to see whether Which? acts against supermarkets that fixed the price of dairy products, but adds: “I don't know how anyone could prove what milk or cheese they bought years ago.”

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