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Credit-card collective action sent back to UK competition authority

16 Dec 2020 / courts Print

Credit-card collective action sent back to tribunal

A recent UK Supreme Court decision on the legal test for collective proceedings has been described as a “hugely important win for consumers” by shopper advocacy magazine Which?

The Supreme Court’s ruling against Mastercard is expected to make it easier for group-damages claims to proceed to trial.

A group action was brought on behalf of 46 million credit and debit-card holders and will now move on to the next stage of litigation, following the decision to dismiss Mastercard’s appeal, and the finding that a 2017 Competition Appeal Tribunal (CAT) judgment was undermined by errors of law.

The Stg£14 billion claim concerns allegedly higher prices levied on UK Mastercard customers through so-called 'interchange fees'.

The case was first brought in 2017 as a collective action by 46 million consumers by Britain’s former financial-services ombudsman Walter Merricks CBE.


The CAT refused the application for a collective proceedings order on the grounds that the claims were not suitable for an aggregate award of damages.

In a statement, Merricks said: ‘The Supreme Court’s decision means that claims relating to losses affected by anti-competitive business wrongdoing in other sectors can be pursued. Today’s judgment sends a powerful signal to companies that infringe competition law that they do so at their financial peril.”

The Supreme Court judgment said courts frequently have to deal with difficult issues in calculating damages in collective proceedings.

Errors of law

The Supreme Court judgment finds that CAT decision was undermined by errors of law. The case has now been sent back to the tribunal for reconsideration.

But the Mastercard legal team has pointed out that key issues divided the judges in the case.

Freshfields Bruckhaus Deringer lawyer Mark Sansom said: “It is important to note that there was a 2-2 split between the judges on a number of the key issues, with two of the judges accepting that the CAT had been entitled to reject the proposed claim, rather than certify it to proceed.

“The tribunal will now engage with the implications of that at a future hearing.”

Rocio Concha (director of policy and advocacy at Which?) said that the route to collective redress would be fairer, simpler and more attainable as a result of the case.

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