The Court of Appeal has allowed Walter Merricks' appeal of the Competition Appeal Tribunal's (the "CAT") decision to refuse a collective proceedings order ("CPO"). The Court of Appeal found that in refusing a CPO in the £14 billion collective action against MasterCard, the CAT had erred on two fronts: (i) by requiring detailed information from the Applicant in relation to the extent of the breach of competition law rules; and (ii) in its interpretation as to whether the claim was suitable for an aggregate award of damages. The Court of Appeal ordered the CAT to re-consider the case on the basis that in order to get a CPO the Claimants only need to demonstrate that the claim has a real prospect of success.


On 19 December 2007 the EU Commission published a decision stating that the EEA Multilateral Interchange Fee (the "MIF") set by MasterCard between 22 May 1992 and 21 June 2008 restricted competition. MIFs are fees retained by banks for each payment card transaction; under the MasterCard scheme, different MIFs applied for different territories and card types. The EEA MIF was the MIF that applied when a card issued under the MasterCard scheme in one EEA Member state was used to buy goods or services from a merchant in another EEA Member State. The EU Commission found that by setting the EEA MIF, MasterCard had made a decision that had as its object or effect the prevention, restriction or distortion of competition within the internal market (in breach of Article 101 TFEU). In particular, the EC Decision stated that in the absence of MasterCard's conduct, the interchange fees charged between banks for cross-border transactions and certain domestic transactions would have been lower.

MasterCard has accepted that the entire cost of the MIF (including UK MIFs in purely domestic transactions) was passed-on by banks to merchants. However, what is in dispute is the extent to which the MIF was passed-on to consumers in the form of increased prices. The Claimants in the Merricks claim (named after Walter Hugh Merricks CBE, the Applicant and Proposed Class Representative) contend that individuals who purchased goods and/or services during the infringement period from businesses selling in the UK that accepted MasterCard cards, were overcharged by £14 billion. The estimated number of people affected in the UK is 46.2 million.

The certification process

An application to commence opt-out collective proceedings against MasterCard was issued in September 2016 under section 47B of the Competition Act 1998. This allows a certified class representative to bring opt-out collective proceedings on behalf of consumers provided: (i) the claims are suitable to be brought as collective proceedings; and (ii) the class of claimants is identifiable. However, in July 2017 the CAT refused the CPO for two principal reasons: (i) a perceived lack of data to determine the level of pass-on of the overcharge to consumers; and (ii) the absence of a plausible means of calculating the loss to individual claimants. The CAT concluded that an aggregate award would lead to claimants obtaining damages which bore no relationship to the loss that they actually suffered, and this was contrary to the compensatory principle.

The Court of Appeal Decision

In April 2019 the Court of Appeal overturned the CAT's decision:

The correct level of overcharge

The Court of Appeal, in considering the Canadian Supreme Court's decision in Pro-Sys Consultants Ltd v Microsoft Corp. (2013), concluded that the function of a tribunal at the certification stage is to be satisfied that the proposed methodology is capable, or offers a realistic prospect, of establishing loss to the class as a whole. By requiring detailed information from the applicant about what data would be available and examining the applicant's experts at a pre-disclosure stage, the CAT exposed the Merricks claim to a more vigorous process of examination than was necessary. The Court of Appeal found that the CAT effectively conducted a mini-trial, when they were only entitled to determine that the experts' proposed methodology was credible. The Court of Appeal concluded that a decision on the adequacy of the data should be made at a later stage when the pleadings, disclosure and expert evidence are complete.

Aggregate damages verses individual loss

At first instance the CAT also concluded that the Merricks claim was not suitable for a CPO because the proposed method of distributing any award would bear little relation to the loss actually suffered by individual members of the class. The Court of Appeal also rejected this argument, stating that the power to make an aggregate award would be negated in large scale opt-out proceedings if a calculation of individual loss was a pre-requisite. The Court of Appeal highlighted that the right to bring collective proceedings under the Consumer Rights Act 2015 was intended to facilitate a means of redress and Parliament chose not to limit this power only to situations where a calculation of individual loss was possible.

MasterCard has sought permission to appeal the Court of Appeal's decision directly from the Supreme Court.


The Merricks judgment is worthy of note for a number of reasons. First, if a CPO is ordered by the CAT, it will be the first CPO to be ordered under the class actions regime brought in by the Consumer Rights Act 2015. To-date, all the proposed class actions that have started in the UK have failed at the CPO stage. The importance of this case was underlined earlier this month, when Roth J stayed two proposed UK Trucks class action claims. One reason for this was because he did not want to make a decision about a CPO in those cases, pending the outcome of MasterCard's appeal to the Supreme Court. Secondly, at £14 billion, with a proposed class size of over 46 million people, it is the largest collective action ever to be brought in the UK. Thirdly, the Merricks claim has shone a spotlight on the role of third party litigation funding in collective proceedings. Initially Gerchen Keller Capital provided £36 million in upfront costs to Merricks in order to pursue the claim, in exchange for recouping 30% of the proceeds, with the ongoing costs of the claim being funded by Innsworth Litigation Funding. This raises two questions: (i) how much would consumers actually receive if the claim was to be successful; and (ii) to what extent will third party funders drive forward the class action regime in the UK? Finally, and perhaps most importantly, the Court of Appeal's judgment may make it easier to bring large scale collective proceedings in the UK. This judgment suggests that the CAT, in considering making a CPO, does not need to consider the credibility of the methodology used to determine overcharge, nor does it need to determine at the certification stage whether the actual individual losses can be calculated.