Competition Appeal Tribunal certifies class action against Mastercard

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Competition Appeal Tribunal certifies class action against Mastercard

Published 15 October 2021

In December last year, we commented on the Supreme Court’s landmark decision in Mastercard Incorporated and others vs. Walter Hugh Merricks CBE, in which an earlier decision of the Competition Appeal Tribunal (“CAT”) was remitted back to that body for re-hearing. The Supreme Court’s decision signalled a move towards US-style “class actions” in the UK. In August this year, the CAT re-heard Mr Merricks’ petition to certify a class action against Mastercard, and found in his favour. The CAT’s further decision will be welcomed by the 46.2 million people who make up the claimant class and who may, ultimately, receive a pay-out from the banking giant. This article will examine the CAT’s judgment and look forward to the impact of Merricks’ now-certified mass claim.

The Facts

The history of the Mastercard litigation is set out in greater detail in our previous article, but by way of a brief chronology:

1) From 1992 to 2008, Mastercard applied a Multilateral Interchange Fee (“MIF”) to all debit or credit card payments in the European Economic Area (“EEA”). Mastercard facilitated a series of linked transactions between consumers, merchants and banks which resulted in consumers paying a small fee on each transaction to Mastercard itself.

2) In 2007, the European Commission held that the rate at which the MIF was set restricted competition in the European Community.

3) Following the Commission’s decision, Mr Merricks, a British lawyer and former Chief Financial Ombudsman, argued that the rate for Mastercard’s UK MIF was based on the EEA MIF, such that UK consumers had been overcharged by the anti-competitive scheme.

4) In 2016, Mr Merricks sought to take advantage of novel legislation in the UK which made it easier for a single claimant to certify competition suits on behalf of a claimant class. Importantly, the CAT Rules allowed for “opt-out” claims to be brought in the name of the lead claimant, allowing Mr Merricks to include, in effect, the entire UK adult population in the claimant class. Mr Merricks sought a Collective Proceedings Order (“CPO”) from the CAT which would enable him to sue Mastercard on behalf of 46.2 million people.

5) In 2017, the CAT dismissed Mr Merricks’ application, identifying several practical hurdles which the collective claim would not overcome. The CAT held that Mr Merricks satisfied the “authorisation condition” (i.e. it would be just and reasonable for him to act as lead claimant), but not the “eligibility condition” (more on which below).

6) In 2019, the Court of Appeal held that the CAT’s decision had been wrong. In 2020, the Supreme Court agreed and ordered the CAT to hear the application afresh. The Supreme Court took issue with the CAT’s original decision on a number of points, outlined below.

The 2017 CAT decision and appeal

CAT Rule 79 requires the CAT to consider whether claims are “suitable” for certification by reference to factors including the costs and benefits of the proceedings being brought collectively, the size and nature of the claimant class and whether the claim is suitable for an aggregate award of damages. The CAT must also determine whether a prospective collective claim “raises common issues” and would be brought on behalf of an “identifiable class of persons.” Together these factors are the “eligibility condition.”

In 2017, the CAT found that Mr Merricks had not identified a sufficient commonality of issues amongst the claimant class. Mr Merricks had not adduced sufficient data in his methodology to establish that similar levels of MIF charges had been passed on to every person who had bought goods or services during the relevant period. The CAT also found at first instance that Mr Merricks’ proposals lacked a satisfactory method for distributing aggregate damages to the claimant class (with Mastercard arguing that each and every claimant needed to be able to prove loss to substantiate a claim for aggregate damages.)

In 2020, the Supreme Court held that the CAT had applied the wrong legal tests to Mr Merricks’ application. The CAT had wrongly treated the suitability of the claims for aggregate damages as a hurdle to certification (rather than, as the CAT Rules envisage, one factor to be taken into account). Further, the Court questioned why a question mark over the quantification of loss at such an early stage should be fatal in collective proceedings, where such an issue in individual claims, brought under the Civil Procedure Rules, would not be.

The 2021 CAT decision

Following the Supreme Court’s decision, Mastercard withdrew its opposition to certification of the claim. It was no great surprise then that the CAT granted a CPO at the re-hearing. However, where the CAT took no issue with Mr Merricks’ ability to act as lead claimant in 2017 (he satisfied the “authorisation condition”), a complaint by one member of the proposed claimant class in the intervening period cast some doubt on Mr Merricks’ suitability. The CAT overcame this complaint in reasonably short order – the issues complained of having no bearing on Mr Merricks’ suitability to represent the claimant class.

At the re-hearing, Mr Merricks sought to amend the claim form to expand the claimant class to include all those British adults who were alive during the relevant period, but who had since died (which would have the effect of increasing the claimant class to 59.8 million). It was argued that the estates of deceased persons could well hold valid claims against Mastercard. Favouring Mastercard’s opposition to the proposal, the CAT refused Mr Merricks’ application to amend the claim form. Deceased individuals cannot bring a claim for damages: their claims would vest in their estate’s (living) personal representative (and in any event, the application to amend the claim form was brought out of time.)

The CAT also stipulated that Mr Merricks’ new litigation funder must give an undertaking in respect of Mastercard’s costs for the collective claim to proceed.


Subject to the provision of a fresh undertaking by the claim’s funders, Mr Merricks will proceed as the class representative under 47B(8) of the Competition Act 1998. The parties will now make submissions on how the class members should be notified of the CPO (and details on how to “opt-out” of the claim should they so choose.)

While the CAT’s new decision is an important development (for Mr Merricks, the huge claimant class, and UK law more generally), the claim must now overcome the substantial evidential hurdle of establishing causation. It is clear that Mastercard will rigorously defend the claim at trial.

Whether, and to what extent, this decision will impact the UK’s attitude to class actions will surely depend on how many people, should Mr Merricks’ claim succeed, come forward to collect their compensation. The UK Government is currently consulting on reforming competition and consumer policy more generally, and the outcome of Mr Merricks’ ambitious action will undoubtedly influence Parliament’s next move in this arena.


Jamie Tomlinson

Jamie Tomlinson

London - Walbrook

+44(0)20 7894 6014

William Allison

William Allison

London - Walbrook

+44 (0) 20 7894 6440