UK Supreme Court: Recent Landmark Collective Actions Hearing

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On 13 and 14 May 2020 there was a landmark hearing in the UK Supreme Court relating to the legal tests to be applied to proposed collective actions in the UK. The hearing was an appeal by Mastercard in relation to an application brought by Walter Merricks CBE to act as class representative on behalf of UK consumers who allegedly suffered loss as a result of interchange fees on Mastercard’s debit and credit cards. The outcome of this appeal will provide the Supreme Court’s first guidance on how the test for ‘certification’ of proposed collective actions should be applied, i.e. whether the proposed group action is suitable to continue. The judgment is expected to have wider implications for future collective actions, including the proposed collective action brought by Mark McLaren.

Background

  • On 6 September 2016, Mr Merricks filed an application for a collective proceedings order (CPO) alleging that UK consumers paid, between 22 May 1992 and 21 June 2008, higher prices as a result of Mastercard’s imposition of unlawful ‘interchange fees’. Retailers pay interchange fees whenever they accept a credit or debit card transaction, and Mr Merricks argues that retailers passed these fees onto all consumers (whether they paid by card or not) in the form of higher prices. The claim was brought by Mr Merricks before the UK Competition Appeal Tribunal (the Tribunal) under legislation introduced by the UK’s Consumer Right Act in 2015.

  • For a proposed collective action to proceed, the Tribunal must make a CPO which authorises the class representative as suitable to represent the class and which certifies the claims (of the proposed class members – in this case, UK consumers) as eligible to be included in collective proceedings. If the CPO application is successful, the claim then progresses to a trial of the common issues amongst the class members, and determination of any individual issues. After success at trial or settlement, the damages are distributed amongst the class members using a distribution method which must be approved by the Tribunal.

  • In July 2017 Mr Merricks’ application for a CPO failed at the first hurdle when it was dismissed by the Tribunal. However, this was subsequently appealed to the Court of Appeal, which in April 2019 found in favour of Mr Merricks. Mastercard then appealed that decision to the UK Supreme Court – which is the highest level court in the UK – and the hearing in the appeal was held on 13 and 14 May 2020 via video-conference.
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13 May 2020

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