There have been two interesting recent decisions in the English courts which cast an interesting light on the English judiciary’s approach to collective redress.
Consumer Rights Act – Mastercard Litigation
The Consumer Rights Act 2015 introduced an opt-out collective redress regime for competition claims. This permits a claimant representative to bring an action for damages on behalf of a group of individuals where this follows on from an 'infringement decision' or 'an alleged infringement' of anti-competitive behaviour prohibited by the Competition Act 1998 or EU law.
The opt-out nature means that claimants are included in the group unless they expressly opt-out. However, claims can only proceed if they are certified as suitable by the Competition Appeal Tribunal (“the CAT”) and this requires a formal hearing before the CAT to determine (i) whether the claims are eligible to be brought on a collective basis i.e. whether they raise the same, similar or related issues of fact or law for an identifiable class and (ii) it is 'just and reasonable' that the person representing the class is authorised to bring the claim. If this stringent eligibility criteria is met, a Collective Proceedings Order (“CPO”) is issued and the class action may continue.
Prior to April 2019, no case had been certified as meeting this criteria, leading many to question the relevance and purpose of the new regime. However, this all changed in Walter Merricks CBE v Mastercard Incorporated & Ors  EWCA Civ 674, when the Court of Appeal reversed the CAT’s refusal to grant a CPO in the MasterCard litigation. This means the largest class action ever brought in the UK is (for now at least) allowed to continue.
This long-running matter follows the EU Commission’s 2007 decision that interchange fees charged by MasterCard on the use of its debit and credit cards were anticompetitive and in breach of EU legislation. Proposed representative, Walter Merricks, applied for a CPO under the new regime to allow him to bring an “opt-out” class action on behalf of all UK consumers (over the age of 16) who purchased goods and services sold by businesses accepting MasterCard between 1992 and 2008.
In July 2017, the CAT rejected the application due to the scale and size of the class, which comprises approximately 46.2 million people seeking damages estimated at £14bn. The CAT held that it would be unworkable to calculate an individual's actual purchases and the different levels of pass through of the interchange fee for the various retailers in the UK over the 16 year period. Accordingly, there was no way of calculating the losses suffered by the claimants on an aggregate or individual basis, and no way of distributing damages. The CAT also held that there was no right to appeal its decision.
Mr Merricks sought the permission of the Court of Appeal to hear an appeal on grounds the CAT’s decision was wrong in law. In September 2019, the Court unanimously ruled in a landmark decision that it has jurisdiction to hear appeals from the CAT, and in April 2019, the Court of Appeal set aside the CAT’s order refusing certification.
The Court concluded that the CAT had adopted the wrong approach to the assessment of evidence and the strength of the case in relation to the pass through fees, and applied the wrong approach to distributing an aggregate award if made. The CAT had demanded too much of the proposed representative at the certification stage. This was not a full trial requiring a detailed and vigorous examination of the evidence; while the data at the certification stage was incomplete, the experts had identified the expected sources of data which would be sufficient to calculate global loss on a methodologically sound basis. As for issues relating to the distribution of an aggregate award, this is a matter for the trial judge to determine and is not a reason not to certify the case.
The CPO application has now been remitted back to the CAT for a re-hearing.
Google and the Safari Workaround
It is alleged that in 2011/2012, Google obtained information about an individual’s internet usage through cookies without their knowledge or consent, bypassing Safari’s privacy settings. Litigation was commenced in early 2018 against Google in the English courts seeking to establish a class action for affected users with damages alleged of up to £3bn. The case, Lloyd v. Google  EWHC 2599, was before the High Court in England in October, which decided that the requirements for a collective action were not met and the action could therefore not proceed on that basis.
The representative claimant sought damages arising from the alleged breaches of data protection principles set down in the Data Protection Act 1986. Section 13 of the Act provides data subjects with a means of obtaining compensation where they have suffered damage as a result of such breaches.
Although the case did not determine the merits of the alleged claim, the Judge did accept that it may well be a claim that could succeed. However, in this case, the claimant had not sought to allege what harm had occurred, instead, it was alleged that commission of the breach was sufficient to sound in damages. This was rejected.
The way in which the claim was pleaded may have been driven by an attempt to persuade the court that the claim should be granted permission to continue as a representative action. To proceed, a representative claimant must have “the same interest” in the claim as those in the class to be represented. The English court held that this was not met in this case. Many claimants would not have suffered any damages at all and those who has suffered damage would not be considered to have suffered the same damage, given that each person’s position is inherently fact specific. Had the court been persuaded that damages could be claimed simply by reference to the breach, then the issues relevant to the representative action application would have been different – all claimants would have suffered from the same breach.
In its judgment the English Court expressed the following view as to the attempt, in this litigation, to bring a claim on an opt-in representative class basis:
“It would not be unfair to describe this as officious litigation, embarked upon on behalf of individuals who have not authorised it, and have shown no interest in seeking any remedy for, or even complaining about, the alleged breaches…. the Representative Claimant should not be permitted to consume substantial resources in the pursuit of litigation on behalf of others who have little to gain from it, and have not authorised the pursuit of the claim, nor indicated any concern about the matters to be litigated”
The Court of Appeal’s more sympathetic approach to applying the eligibility criteria in MasterCard will no doubt influence how the CAT deals with evidential issues and questions relating to the distribution of damage awards at the class action certification stage going forward, and lower levels of scrutiny are now expected at this initial stage.
However, the Court made clear that certification must be an ongoing process that is kept under review, and the CPO could be revoked if there are genuine concerns about the adequacy of evidential data as the case advances. The risk of a significant wasted costs order if the CPO is subsequently revoked will be an important factor that will weigh heavily on claimants and their litigation funders’ minds. So while the Court’s decision to reverse the CAT’s decision is likely to encourage more claimants and litigation funders to “have a go” at passing the certification stage, the reality is that only those claims that properly stack up evidentially are likely to advance significantly beyond this point and sound in a damages award. And indeed, it still remains to be seen whether MasterCard, if certified by the CAT at the re-hearing, is capable of progressing beyond the pleadings and disclosure stages.