A Class Act: Court of Appeal Revitalises Mastercard Claim

16 May 2019

The much anticipated Court of Appeal decision in Walter Hugh Merricks CBE v Mastercard Inc[1] has overturned the Competition Appeal Tribunal’s (CAT) first-instance decision which dismissed the class representatives’ (Walter Merricks) application for a collective proceedings order (CPO).


The Consumer Rights Act 2015 introduced the power to bring collective proceedings in the UK.

In proceedings brought in the CAT, Mr Merricks sought to bring a representative action for an aggregate award of damages and interest totalling £14bn on behalf of a wide class of individuals who purchased good and services from businesses in the UK which accepted Mastercard between 1992 and 2008. The claim emerged from the EU’s decision in 2007 that Mastercard had infringed competition law through the imposition of a default multilateral interchange fee (MIF)  charged between banks for transactions involving the use of a Mastercard card, but which was effectively paid by the retailers in the form of a bank service charge. The retailers ultimately passed on the MIF to their own customers in the form of increased prices.

Broadly speaking, a party applying for a CPO must demonstrate that the claims: (i) are bought on behalf of an identifiable class of persons, (ii) raise common issues of fact or law, and (iii) are suitable to be brought in collective proceedings, taking into consideration all matters the CAT thinks fit.

In applying these criteria, the CAT refused the CPO for two principal reasons:

  1. it was not satisfied that it would be possible to evidence the level of MIF passed on from retailers to consumers in the form of price increases across the entirety of the UK during the relevant period; and
  2. even if an aggregate award of damages could be calculated, the CAT could see no plausible way of reaching even a rough-and-ready approximation of the loss suffered by each individual claimant.

Court of Appeal Decision

The Court of Appeal overturned the CAT’s decision, finding that: the CAT had (i) erred in law in its approach to the assessment of the evidence regarding the pass-on of the MIF, and (ii) adopted the wrong test in its approach to distribution.

Patton LJ stated that, at the certification stage, Walter Merricks had to do no more than demonstrate that the claim had a real prospect of success and that the methodology used was at least capable of assessing an aggregate award of damages. He considered that the CAT had wrongly applied a more rigorous test, attempting to determine what was capable of being proved at trial, on evidence that had been identified but that had not yet been fully assessed.

As regards distribution, the Court of Appeal held that it was not for the CAT to calculate the individual losses to be distributed as “distribution is a matter for the trial judge to consider…’.


This judgment will certainly breathe new life into the collective action regime and sets a lower hurdle to overcome for certification of any future collective action claims, which will perhaps encourage claimants and litigation funders to proceed under the regime.

The judgment also highlights, however, that certification is a continuing process and, although in this case the CAT had been premature in its assessment of the claim, the CAT is not precluded from revisiting whether or not it is still appropriate to continue the claim at a later stage in the proceedings. The adverse cost risks of this could potentially outweigh any benefits of the low barrier to certification.

We continue to monitor the developments of this case with interest, as Mastercard has publically declared its intention to appeal to the Supreme Court.

[1] [2019] EWCA Civ 674

Leigh Callaway Author
Leigh Callaway
Senior Associate
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Alex Taylor Author
Alex Taylor
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