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Collective redress following Merricks v MasterCard

Posted: 14/12/2020


On Friday 11 December, the Supreme Court handed down its long-awaited decision in Merricks v MasterCard, dismissing MasterCard’s appeal and remitting the claim to the Competition Appeal Tribunal (CAT) for consideration. The judgment heralds a more ‘representative-friendly’ regime for those wishing to pursue opt-out competition claims for collective redress.

Collective competition proceedings are governed by section 47B of the Competition Act 1998. The regime was introduced by the Consumer Rights Act 2015 and allows for opt-in and opt-out, follow-on or stand-alone competition claims to be brought in the CAT. Despite the passage of five years, no claim has yet been granted a collective proceedings order (CPO). The first claim, brought by Dorothy Gibson against Pride Mobility Products Limited, failed for economic reasons; and Merricks’ claim came next. Where Gibson’s claim was ultimately determined to be too small, Merricks’ claim is huge by any measure – he is seeking to represent 46.2 million UK consumers and to recover damages in the billions. The claim follows on from the 2014 decision of the European Commission that MasterCard’s interchange fees were set at an unlawfully high level from 22 May 1992 to 20 June 2008. 

The Supreme Court’s decision is a significant achievement for Walter Merricks, the former Financial Ombudsman, who persevered despite the initial rejection of his application for a CPO by the CAT.

It is also a good day for UK consumers and for the Consumers’ Association, better known as Which?, which successfully campaigned for the introduction of the opt-out regime in 2015 and intervened in this case in the Supreme Court.

The Supreme Court’s decision was slightly delayed due to the sad death of Lord Kerr, whose agreement with Lord Briggs and Lord Thomas determined the outcome. In two of the most striking findings, the judges found that the question for the CAT is simply whether individual or collective proceedings are more suitable for bringing the claim, and confirmed that the representative does not need to show that they will be able to distribute the damages to each member of the class in a way that compensates them for their individual loss. Lord Sales and Lord Leggatt warned the new approach would significantly reduce both the role and utility of the CPO process and the safeguards associated with certification.

This is the latest in a number of significant developments for collective redress across the UK and Europe over the course of 2020. A new group action procedure came into force in Scotland on 31 July (albeit on an opt-in basis for now); and on 24 November, five years after the ‘Dieselgate’ scandal, the European Parliament approved the new directive on representative actions for the protection of the collective interests of consumers.

Next year is also set to be significant. There are a number of claims in the queue waiting for the decision in Merricks, including consumer claims – one relating to an alleged abuse of dominance in the boundary ticketing practices of two train companies, brought by Justin Gutmann, and another relating to car delivery charges brought by Which? alumni Mark McLaren. It is also likely that the decision will encourage both law firms and litigation funders to proceed with new competition claims. In addition, interested parties are waiting for the Supreme Court hearing of (another Which? alum) Richard Lloyd’s data claim against Google, which relies on the representative claims procedure under part 19.6 of the Civil Procedure Rules.

It’s fair to say there are interesting times ahead…


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