Arcadia Group Brands Limited & ors v Visa Inc & ors1


This case arose in the context of ongoing damages claims brought by a number of retailers and other merchants against both Visa and MasterCard for breaches of competition law in relation to the charging of interchange fees in the Visa and MasterCard payment systems.

MasterCard and Visa both operate card payment systems under which merchants are charged, inter alia, an “interchange fee” on transactions processed using MasterCard and VISA branded credit and debit cards. The level of fee may be negotiated between the particular “acquiring bank” (ie the merchant’s bank) and “issuing bank” (the consumer’s bank) for any transaction but, more commonly, is set by reference to default rates known as “multilateral interchange fees” (MIF).

In a decision dated 19 December 2007, the European Commission found that MasterCard’s intra-EEA MIF arrangements infringed EU competition law and did not merit an exemption. The duration of the infringement was found to be from 22 May 1992 to 19 December 2007. The Decision was appealed by MasterCard but was finally affirmed by the Court of Justice of the European Union in September 2014.

The VISA scheme was also subject to scrutiny by the European Commission over a number of years. In 2010 and 2014, VISA entered into certain commitments in relation to MIFs with the European Commission. As such no infringement decision has been issued against VISA, despite the similarity in the factual matrix.

A number of damages claims have been brought against both MasterCard and VISA in the English courts by a variety of merchants including, in this case, a number of high street retailers. This case related to VISA; claims against MasterCard raising similar issues are ongoing and are likely to come before the courts in early 2015.

Strike-out application

The claimants’ claims were brought on the basis that the infringement was a continuous and ongoing one and that they were entitled to claim for a period going back to 1977. In this decision the court ruled on an application made by Visa to strike out on limitation grounds those parts of the claimants’ claims that alleged infringements of competition law which dated back more than six years before those claims were filed.

In response, the claimants sought to rely on section 32(1)(b) of the Limitation Act 1980. This section provides that where a fact “relevant to the claimant’s right of action” has been concealed by the defendant, time does not start to run for limitation purposes until the claimant discovered the concealment, or could with reasonable diligence have discovered it.

The claimants argued that Visa had deliberately concealed, and continued to conceal, facts relevant to their cause of action and that, accordingly, time had not started to run.

The court, although initially attracted by the claimants’ argument, held that the facts that remained concealed at the time the court was considering limitation were not “relevant” within the meaning of section 32(1)(b). Referring to Johnson v Chief Constable of Surrey2  and a line of subsequent decisions, the court found that so long as the claimant is in possession of facts that are sufficient to enable a cause of action to be pleaded in such a way that it cannot be struck out for want of particularity, section 32(1)(b) is not available. In other words, ignorance of facts that would support a claim, but which are not essential for it to be pleaded, does not postpone the point at which time starts to run for limitation purposes under section 32(1)(b).

In this case, the defendants relied on a number of events and material in order to show that the claimants had sufficient knowledge of the matter to plead a claim.

These included, in relation to the EEA MIF:

  • In May 1997, EuroCommerce (a European retailers’ association) filed a complaint with the European Commission regarding the Visa payment system
  • In October 2000, the Commission issued a press release about its preliminary Statement of Objections to Visa International in relation to its interchange fees
  • In August 2001, the Commission issued a formal decision relating to other aspects of the Visa payment system that made reference to the EEA MIF
  • In August 2001, the Commission issued a further notice inviting parties to submit representations regarding modifications proposed to Visa’s EEA MIF arrangements
  • In July 2002, the Commission issued a decision granting an exemption to Visa in respect of modified EEA MIF arrangements, referring in detail to the MIF structure and concluding that the prior arrangement had the effect of restricting competition; there was also a related press release.

In relation to the domestic MIF, the defendants also relied on a complaint made by the British Retail Consortium in September 2000 and a subsequent Office of Fair Trading (OFT) investigation. The OFT issued a number of announcements and press releases in the period between November 2004 and June 2006.

In the light of the material above, the court concluded that the claimants had been unable  to demonstrate that there were concealed facts that prevented them from pleading a case: this was a not a “secret cartel” case which remained unknown until many years afterwards. Notwithstanding that some information (eg in relation to whether particular defendants were involved in infringing activity) was not available, the claimants could properly particularise their claim. 

Accordingly, the court granted the defendants’ application and struck out those parts of the claim alleging infringements in the period more than six years before the claims were issued.


The claimants were in a way victims of what has been referred to as a “generous approach” towards claimants with respect to the level of scrutiny that the court will apply to Particulars of Claim in competition cases. The Court of Appeal has acknowledged that “it is in the nature of anti-competitive arrangements that they are shrouded in secrecy and so it is difficult until after disclosure of documents fairly to assess the strength or otherwise of an allegation that a defendant was a party to … anti-competitive conduct”3 . As such, the court is likely to adopt a more lenient approach when considering whether claims are sufficiently particularised than in other cases. It follows that, as the law currently stands, a claimant need not – and for limitation purposes cannot – wait until it has the complete factual picture surrounding an infringement before proceeding with a claim.

Looking forwards, this area of law will be affected by the new EU Damages Directive . The Directive seeks to harmonise procedures for private damages claims across the EU, and includes a number of provisions relating to limitation, including the establishment of an EU-wide minimum five year limitation period. The Directive also provides that limitation periods shall not begin to run until the infringement has ceased and the claimant knows, or can reasonably be expected to know, of the infringing behaviour.

The Directive was published in the Official Journal on 5 December 2014 and Member States have until December 2016 to transpose it in national law. Article 22 provides that the national measures shall not apply retroactively. It is, at present, unclear precisely what that means in practice or how it will affect claims brought in relation to existing infringements. In this case the claimants sought to argue that the court should have reference to the Directive in deciding this case, on the basis that it would be unsatisfactory to strike out the claim only for it to be resurrected when the Directive comes into force. The court referred to the temporal application provisions in Article 22 of the Directive to dismiss this point.

For the time being, claimants and practitioners need to be alive to any information related to an alleged cartel in the public domain and consider carefully the effect this may have on limitation issues in deciding whether – and when – to issue a claim.