£14bn damages claim against Mastercard revived by Court of Appeal ruling
Former financial ombudsman Walter Merricks is trying to bring legal action on behalf of an estimated 46.2 million people.
A £14 billion damages claim brought against Mastercard on behalf of millions of UK consumers has been revived by a “landmark” ruling by the Court of Appeal.
Former financial ombudsman Walter Merricks is trying to bring legal action against the card giant on behalf of an estimated 46.2 million people.
He alleges that Mastercard’s breaches of competition law, found by the European Commission in 2007, have led to UK consumers paying higher prices on purchases from businesses that accepted Mastercard.
Mr Merricks’ proposed class action was thrown out in July 2017 by a specialist tribunal, which ruled the claim was “not suitable to be brought in collective proceedings”.
It’s now time for Mastercard to admit the damage they did, to apologise to the British public, and to agree to pay the compensation they owe Walter Merricks
But, giving judgment in London on Tuesday, senior judges found that the Competition Appeal Tribunal (CAT) had applied the wrong legal test in deciding whether to give the claim the go-ahead.
Lord Justice Patten, sitting with Lord Justice Hamblen and Lord Justice Coulson, said the CAT “demanded too much” information about how the fees Mastercard charged on transactions were said to have been “passed on” to consumers.
The judge also ruled the tribunal misdirected itself in relation to how any damages which might ultimately be awarded were to be divided among the claimants.
Mr Merricks’ proposed claim will go back to the CAT, which will have to reconsider whether to allow it to proceed.
In a statement after the ruling, Mr Merricks said: “I am very pleased with today’s decision.
“It is nearly 12 years since Mastercard was clearly told that they had broken the law by imposing excessive card transaction charges, damaging consumers over a prolonged period.
“As a result we all had to pay higher prices in the shops than we should have done – while Mastercard have pocketed the profits.
“It’s now time for Mastercard to admit the damage they did, to apologise to the British public, and to agree to pay the compensation they owe.”
Mr Merricks’ solicitor Boris Bronfentrinker, from Quinn Emanuel Urquhart & Sullivan, said: “Today is truly a landmark day for all UK consumers that Mr Merricks seeks to represent in a claim to recover the billions in damages caused to them by Mastercard’s unlawful anti-competitive conduct.”
A Mastercard spokeswoman said the company was seeking permission to appeal against the ruling to the Supreme Court.
She said in a statement: “This decision is not a final ruling and the proposed claim is not approved to move forward, rather the court has simply said a rehearing on certain issues should happen.
“Mastercard continues to disagree fundamentally with the basis of the claim and we believe UK consumers receive real value from the security, convenience and consumer protection of our payment services.”
The proposed claim follows the European Commission’s 2007 decision that Mastercard had breached competition law in relation to the setting of certain fees charged between banks over Mastercard transactions.
Mr Merricks’ claim, which seeks “an aggregate award of damages and interest totalling some £14.098 billion”, is one of the first mass consumer claims brought in the UK after the introduction of a class action regime in 2015.
The proposed action is an “opt-out” claim, which means potential claimants – anyone who was over the age of 16 and resident in the UK for at least three months between 1992 and 2008, and who made a purchase from a business that accepted Mastercard – are part of the action unless they specifically choose not to be.