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A windfall for all? Prospects for consumer class actions for competition damages greatly boosted by the Court of Appeal

Posted: 24/04/2019

The Court of Appeal has overturned a ruling of the Competition Appeal Tribunal (CAT), which had dismissed the applicant’s application for a collective proceedings order (CPO) to bring an opt-out class action against MasterCard (Walter Hugh Merricks CBE v MasterCard Inc & Ors). The proceedings follow on from the European Commission’s 2007 finding that MasterCard infringed EU law by imposing multilateral interchange fees (MIFs) on the use of MasterCard debit and credit cards. The proposed class consists of an estimated 46 million individuals who made purchases from UK businesses that accepted payment via MasterCard, each of whom are said to have borne the burden of the overcharge which retail merchants passed onto consumers as a consequence of the MIFs. The aggregate award of damages for the entire class is estimated at around £14 billion. 

Legal background

The Consumer Rights Act 2015 significantly reformed the collective actions regime in the UK, allowing such actions to be brought before the CAT by a certified class representative. [1] The CAT is permitted to make an award of damages in collective proceedings without undertaking an assessment of the amount of damages recoverable in respect of each represented person. Prior to proceedings advancing, the CAT must grant a CPO. In doing so, it must be satisfied that a proposed action brings together claims which are brought on behalf of an identifiable class of persons, that they raise common issues and that they are suitable to be brought in collective proceedings. In considering this latter factor, the CAT is allowed to take a number of variables into account, including whether the claims are suitable for aggregate damages, the size and nature of the class, and whether collective proceedings are an appropriate means for the fair and efficient resolution of the common issues.[2]

Rejection of the CPO

In July 2017, the CAT dismissed the applicant’s CPO application at first instance, on two principal grounds. Firstly, it asserted that the variation in the extent to which the overcharges were passed onto consumers by retail merchants as price increases, as well as the amount which each individual spent at those merchants, was too great. Consequently, it found that the issues were not sufficiently common to all the individual claims. In stressing this, the CAT held that there was insufficient data to facilitate the method that the applicant had presented as being able to determine the level of pass-on to consumers. Secondly, the CAT applied a strict test regarding suitability for the award of aggregate damages. In its view, loss could only be assessed on this basis if it would then be possible to devise the means by which the loss could be distributed on an individual basis.


In handing down judgment on the applicant’s appeal, the Court of Appeal in essence determined that the CAT had expected too much, too soon. While it was for the proposed representative to show at certification stage that the claim had a real prospect of success, the granting of a CPO did not require the proposed representative to be able to produce all of the data that would be required to apply the methodology for calculating the class’s aggregate loss. Rather, the court held that ‘the availability of data sufficient to allow the methodology to be operated on what the CAT described as a sufficiently sound basis ought at the certification stage to be looked at in terms of what information can be made available for use at the trial’.[3]

The Court of Appeal also criticised the CAT’s apparent attempt to create a high threshold for certification as regards commonality of the issues. While it might transpire during the course of collective proceedings that the class representative had insufficient means to demonstrate the level of overcharge being passed onto consumers, it was more appropriate for that decision to be taken once the pleadings, disclosure and expert evidence stages had been completed.  This view of certification as a continuing process, which might see the CPO being revoked at any time, clearly constitutes a potential sting in the tail for would-be class representatives.

As regards the distribution of an aggregate award, the Court of Appeal held that the CAT had restricted itself too narrowly. Whilst it might potentially be impossible to calculate on an individual basis  each class member’s loss, the court held that ‘the CAT is not required … for certification purposes to consider more than whether the claims are suitable for an aggregate award of damages which, by definition, does not include the assessment of individual loss’.[4]

Consequently, the Court of Appeal remitted the application for a CPO back to the CAT for reconsideration.  However, MasterCard has declared its intention to appeal to the Supreme Court.


This judgment has potentially very significant ramifications in terms of releasing the brake which has, so far, been applied to competition related class action damages in the UK. Policy considerations and access to justice arguments appear to have been factors in the Court of Appeal’s decision. Absent this particular collective proceeding being given the chance to fly, the likelihood of individual consumers bringing their own follow-on actions against MasterCard is likely to be negligible, while the cost implications of such a scatter-gun route to redress would in any event make it nigh on impossible.   


[1] See section 47B of the Competition Act 1998, as amended by the Consumer Rights Act 2015

[2] See Rules 73-98 of the Competition Appeal Tribunal Rules which set out the procedure regarding collective proceedings

[3] Merricks v Mastercard Inc [2019] EWCA Civ 674, Para 50

[4] Merricks v Mastercard Inc [2019] EWCA Civ 674, Para 62

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