Merricks fights on in landmark £14bn Mastercard consumer claim

Mastercard: legal uncertainty over appeal

Lawyers for one-time Law Society official and Chief Financial Services Ombudsman Walter Merricks have filed an application for permission to appeal the Competition Appeal Tribunal’s (CAT) decision to dismiss the proposed £14bn collective action against Mastercard.

The claim was 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 was 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 collective proceedings order 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”.

In a statement, Mr Merricks’ solicitors, Quinn Emmanuel, said there was “some legal uncertainty” as to whether there was a direct right of appeal to the Court of Appeal or whether it needed to go to the Administrative Court for a judicial review.

“However, given that this is the first ever judgment on an application for collective proceedings, and the very significant public policy issues at stake, Mr Merricks is confident that the case will ultimately end up before the Court of Appeal and that the appeal or judicial review will succeed.”

His counsel are Monckton Chambers’ Paul Harris QC, and Marie Demetriou QC and Victoria Wakefield of Brick Court Chambers.

Mr Merricks acknowledged that he could be in for “a long fight” but argued that Mastercard was trying to argue “both ways” as it also faces claims from retailers, in which he said the credit card company submitted that the retailers passed on the illegal fees to consumers.

He continued: “I believe that the tribunal was wrong in its analysis and in the legal test that it applied. The conclusion that it would not be enough for me to prove the loss suffered by the class as a whole and that I needed to show that I could calculate the actual loss suffered by each individual consumer cannot be correct.

“The government decided that a new regime was needed to allow consumers to recover the losses caused to them by illegal, anticompetitive conduct engaged in by big business. If I can establish the total amount of harm that Mastercard has caused to UK consumers, then why should consumers then get nothing at all if I cannot calculate the precise loss that each individual consumer suffered?

“Rather than allow consumer recovery, this would reward unlawful conduct by allowing companies to keep their ill-gotten gains. An effective consumer redress regime that allows for private enforcement can be a real support to the public enforcement of competition law. This is what the government and the competition authorities wanted to bring about.”

Mastercard has until 8 September to file a response to the application.

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