CAT dismisses opt-out collective proceedings against MasterCard

The Competition Appeal Tribunal has rejected an application by Walter Merricks as the putative class representative for a collective proceedings order in a £14 billion opt-out action against MasterCard under section 47B of the Competition Act 1998.  The proposed proceedings would have aggregated follow-on actions for damages arising from the European Commission’s finding that MasterCard's EEA multilateral interchange fees infringed Article 101 TFEU.

The CAT denied certification of the claim on behalf of a proposed class comprising some 46 million individuals who between May 1992 and December 2007 purchased goods or services from businesses selling in the UK that accepted MasterCard cards.

The CAT found that the claimants had not put forwarded a cogent methodology that could be applied to calculate an amount reflecting the consolidated individual claims and there was no plausible way of arriving at a sum that approached an approximation of the loss.

The CAT was critical of Merricks’ approach for calculation of the loss on the basis of a ‘top down’ method which gave a sum for the loss suffered by the class as a whole, rather than seeking to establish the losses suffered by the individual claimants.  The CAT was also sceptical of whether damages could be awarded to a class of potentially 46 million people according to the compensatory principle.

Merricks was not given the opportunity to serve an amended claim form as was allowed in the Gibson Scooter Mobility case. 

The CAT did confirm, however, that had it certified the class action it would have authorised Merricks to serve as the class representative.

The CAT's judgment is important in its assessment of the new provisions relating to funding of collective proceedings and costs under section 47C of the Competition Act.

The ruling indicates that the CAT will scrutinise applications for collective proceedings carefully.  It may mean that similar cases will tend to focus on less ambitious definitions of the class of claimant affected, at least until there has developed a sizeable body of case law establishing how the CAT will approach issues of certification.

Case 1266/7/7/16 Walter Hugh Merricks CBE v MasterCard Inc and Others, 21 July 2017