Court of Appeal clears way for Mastercard hearing

Merricks: Representative claimant

The Court of Appeal has ruled that it has jurisdiction to hear an appeal against the decision that stopped the massive £14bn Mastercard class action – the biggest opt-out claim in English legal history.

It was ruling on the preliminary issue after the Competition Appeal Tribunal (CAT) said last year that there was no right to appeal its decision to deny the representative claimant, solicitor Walter Merricks, a collective proceedings order (CPO).

The claim is a follow-on action after Mastercard was found to have infringed EU law by imposing charges (known as ‘interchange’ fees) on the use of MasterCard debit and credit cards. It was claimed that this increased costs for retailers and consumers.

It is brought on behalf of a class of 46m people who used a Mastercard over a 16-year period, but the CAT dismissed Mr Merricks’ application for a CPO because it was not satisfied that his experts would be able to get the evidence to show that the illegal fees were then passed on to consumers in the form of higher prices.

Further, it said there was “no plausible way of reaching even a very rough-and-ready approximation of the loss suffered by each individual claimant”.

Giving the ruling of the Court of Appeal, Lord Justice Patten said that, as the tribunal itself had observed, “a refusal of a CPO is likely to prevent individual members of the represented class who have suffered loss from obtaining any compensation”.

He went on: “The fact that class members are left with their individual claims is nothing to the point.”

The Court of Appeal heard in that the parties were divided on the jurisdictional issue of whether the proposed representative had a right of appeal or whether he must bring that challenge by judicial review.

Mr Merricks issued a notice seeking permission to appeal to the Court of Appeal and issued proceedings in the High Court seeking judicial review of the decision “on essentially the same grounds”.

Patten LJ said that “put shortly, the question of jurisdiction turns on the meaning and effect of the words ‘as to the award of damages’ in section 49(1A)(a)”.

He said Mr Merricks argued that the words were “merely descriptive of the nature of the claim made” and did not limit the right of appeal to a decision whether or not to award damages made at the trial.

“The position of Mastercard, again shortly stated, is that the words ‘as to the award of damages’ limit the right of appeal either to a trial decision refusing to make an award of damages or an interlocutory decision made on an application to strike out or for summary judgment either dismissing or refusing to dismiss the claim.”

Patten LJ said the disputed words had to be “considered and construed in the light of the addition to the tribunal’s jurisdiction of collective proceedings and in a way which accommodates the introduction of collective proceedings and the particular remedies available in them”.

He concluded that the section did provide a right of appeal on a point of law arising from a section 47B(4) decision.

Coulson and Hamblen LJJ agreed.

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