MasterCard wins UK class action fight, appeal may be on the cards

The case was brought by former chief financial services ombudsman Walter Merricks to seek damages on behalf of 46.2m consumers who used MasterCard credit and debit cards in the 16 years up to mid-June 2008, claiming that the card company applied anticompetitive fees to process the payments, which were then passed onto consumers.

The CAT's judgment was that the claim was not suitable to be brought under the collective actions regime, with the tribunal not satisfied that evidence could be produced to show that fees charged by Mastercard to businesses were then passed on to consumers in the form of higher prices.

The claim, which was originally calculated at £19bn but has since been cut due to a lower estimated damage to consumers, is the biggest in UK legal history.

Merricks has acted as the representative for this consumer-focused collective action case, which is being funded by litigation funding specialist Gerchen Keller Capital.

Merricks, whose collective case is one of several being brought against Mastercard and Visa, said he was "actively considering" with his advisors and litigation funders the possibility of an appeal.

“I am surprised and disappointed that the Competition Appeal Tribunal has rejected my application to bring collective proceedings against Mastercard."

The former regulator noted that the collective action regime was introduced asp art of the Consumer Rights Act to overcome the difficulty for consumers seeking to recover losses from competition law infringements.

"I am concerned that this new regime, designed to benefit consumers, may never get off the ground. The granting of the collective proceedings order in this case would have allowed 46m consumers to recover the losses caused to them by Mastercard’s proven illegal conduct.

"It is, however, unfortunate that the Tribunal considered that it was not satisfied that my experts would be able to get the evidence to show that the illegal fees charged by Mastercard to businesses were then passed on to consumers in the form of higher prices."

He also expressed disappointment that the CAT determined that even if he could identify accurately the loss suffered by all 46m consumers, the fact that he could not precisely calculate the individualised loss for each of those 46m consumers, meant they should get nothing at all.

"I believe these are matters my advisers could have addressed and overcome had the claim been allowed to proceed. I am actively considering with my advisors and litigation funders the possibility of an appeal."

Mastercard welcomed the CAT judgment refusing certification for the proposed collective action.

"As set out in Mastercard’s arguments to date, we believe that the claims were completely unsuitable to be brought under the collective actions regime. The Tribunal sided with this position," a spokesman said.

"We firmly believe that consumers derive real value from our network through the benefits of security, convenience and consumer protection, and we remain committed to investing in our services in order to continue to meet the rapidly evolving needs of all our customers."