Mastercard to take card-fee mass lawsuit fight to UK's top court

30 April 2019 7:00pm

23 April 2019. By Simon Zekaria.

Mastercard plans to take its fight against a proposed mass lawsuit over its card fees to the UK’s highest court.

The payments-card operator has told MLex that it will ask the Supreme Court for permission to challenge a Court of Appeal ruling last week that reopened it to the risk of a collective action for consumer redress that would be the largest in UK legal history.

The appeal judges overturned a decision by the Competition Appeal Tribunal, the UK's specialized competition court, that had rejected the collective action on behalf of 46 million consumers.

In the planned action, former consumer-dispute arbiter Walter Merricks is seeking a landmark 14 billion pounds ($18 billion) in damages for alleged inflated card fees over several years.

The claim stems from a European Commission decision from 2007 that said Mastercard’s interchange fees — bank-to-bank charges when a purchase is made — were illegally high over several years.

In July 2017, the CAT turned down Merricks' application for certification of the claim, ruling that it wasn’t satisfied that Merricks would be able to prove that fees charged to businesses by Mastercard were then passed on to consumers in the form of higher prices, or to precisely quantify and distribute the monetary loss for every consumer affected.

Merricks went to the Court of Appeal, which last November authorized him to seek permission to challenge the ruling. It then held a two-day hearing on the issue in February.

In a ruling last week, the Court of Appeal said the CAT made legal errors, and in doing so, it was “premature and wrong” for it to refuse to certify Merricks' claim. The court said the CAT made errors in its analysis of loss and damage and said its approach to evidential burdens required to certify mass lawsuits was misdirected.

Appeal judges said the case should be remitted back to the CAT for re-review, and they also denied Mastercard permission to appeal the ruling. That means Mastercard must go directly to the Supreme Court if it wants to fight the appeal court ruling.

Merricks says the action is key to the progress of the UK’s fledgling class-action regime. Mastercard says the claim is unsuitable to be brought and should be thrown out.

Merricks’ bid to bring a mass claim is the headline act for a new regime brought into force in October 2015 with a major overhaul of UK collective action procedures, intended to allow large classes of consumers to gain redress from alleged breaches of competition law.

On that basis, Merricks contends his claim is a litmus test of a mass right to win compensation from corporate antitrust failings.

The 2015 changes saw the introduction of an "opt-out" collective-redress procedure for claims in the CAT, but these have yet to get off the ground. Two attempts so far to obtain a “collective proceedings order,” which would certify a collective claim for trial, have been rejected by the court.

The case reference is C3/2017/2778 Walter Hugh Merricks vs Mastercard Incorporated and Others.

ABA 2019