In a major milestone for the UK’s consumer class action regime, the UK’s Competition Appeal Tribunal (CAT) has recently certified the first application for a collective proceedings order (CPO) on an opt-out basis in the case of Walter Hugh Merricks CBE v Mastercard Incorporated and Others. The case will now proceed to trial giving Mr. Merricks the green light to pursue a claim against Mastercard on behalf of around 46 million card holders, estimated to be worth up to £15bn.

For those unfamiliar with the world of class actions, a CPO is a pre-requisite for opt-out collective actions seeking damages for breaches of competition law. Under an opt-out regime, a claim is brought on behalf of all those who fall within a defined class of claimants unless they take certain steps to opt out. The opt-out regime is fairly new and was introduced for the first time in the UK with the advent of the Consumer Rights Act 2015.


The claim is brought by Mr. Merricks, as the authorised class representative on behalf of over 46 million consumers, and seeks damages in relation to alleged anticompetitive so-called ‘interchange fees’ (card transaction fees) levied between 1992 and 2008.

The claim itself stems from a finding of the European Commission that Mastercard had unlawfully inflated the interchange fees charged between banks on Mastercard transactions. Mr. Merricks claims that these inflated fees were passed on by companies to their customers, causing loss to consumers who purchased goods or services from businesses using their Mastercards.

Procedural chronology

In 2017 the CAT had originally refused to grant Mr. Merricks a CPO.  The Court of Appeal reversed that decision.  The Supreme Court then largely confirmed the Court of Appeal’s conclusion and remitted the case back to the CAT for reconsideration.

The finding of the Supreme Court in December 2020 was of crucial importance because it shed light as to the correct approach for the CAT to adopt when considering whether claims are suitable for collective proceedings. Of particular note, the Supreme Court upheld the Court of Appeal’s subsequent ruling that the CAT had demanded too much of Mr. Merricks at the certification stage.

As a result of the Supreme Court’s clarification, Mastercard no longer opposed certification in the remitted proceedings before the CAT. However, the CAT was still required to consider two key issues:

  • whether Mr. Merricks was entitled to include deceased persons in the proposed class; and
  • whether Mr. Merricks’ claim for compound interest was suitable to be brought in collective proceedings.

Inclusion of deceased persons

On remittal, Mr. Merricks sought to include deceased persons as class members in their own right. Whilst the CAT accepted that a class definition could include the representatives of the estates of deceased persons, it ruled that the Competition Act 1998 did not allow claims to be brought by deceased persons in their own right.

In addition and in any event, the CAT noted that since the limitation deadline had passed, it was not open to Mr. Merricks to amend the proposed class definition by adding new class members.

Inclusion of compound interest

Mr. Merricks had included a claim for compound interest in the Claim Form from the outset, alleging that all class member would have either incurred borrowings or financing costs to fund the overcharge they suffered, or have lost interest that they would otherwise have earned through investment of the overcharge, or a combination of the two.

At the remittal hearing, the CAT restricted the claim to simple interest, finding that Mr. Merricks had failed to put forward any plausible or credible method for calculating the compound interest claimed. In particular, the CAT held that Mr. Merricks was required to show how the class members funded the additional expense, or what they would have done with the additional money if there had been no overcharge.

What are the implications of the CAT’s judgment?

The CAT’s judgment in Merricks v Mastercard is pivotal as it is the first claim to be certified on an opt-out basis since the current regime for collective competitions claims was introduced under the Consumer Rights Act 2015.

Although the opt-out regime has taken time to fully fledge since its genesis in 2015, momentum is now building with a significant number of opt-out CPO applications awaiting to be determined by the CAT. Over the coming months, a number of judgments are expected in respect of applications that had been stayed pending the outcome of the Supreme Court’s judgment in Merricks v Mastercard.  It is anticipated that these will provide greater clarity on the application of the Supreme Court’s judgment, and will also at the same time provide answers to questions that yet to be considered by the CAT, such as for example, how a carriage dispute between competing proposed class representatives should be resolved. In the meantime however, the spotlight will be turned on Mr. Merrick’s claim as it progresses beyond the certification stage.

Edwin Coe has been litigating class claims for over 30 years including competition claims.  If you have any questions regarding this case development or its practical implications, please contact David Greene or any other member of our Class Action and Financial Litigation team.


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