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Mastercard v Merricks: has the Supreme Court opened the door to more collective actions?


In December 2020, the UK Supreme Court handed down its much-awaited judgment in the case of Mastercard and others v Merricks (2020) ("Merricks").   This is an important ruling because it lowers the bar for obtaining permission for collective actions to proceed.  If the Merricks action is allowed to go ahead, Mastercard will face a claim for a pay-out of over £14 billion to approximately 46 million UK consumers - which could open the door to many more incipient collective actions.

Background to collective proceedings

Merricks is at the forefront of a relatively new area of law to the UK: collective proceedings for damages resulting from breaches of competition law. This particular claim follows on from the European Commission's finding in 2007 that Mastercard’s intra-EEA multilateral interchange fees (“MIFs”), taken when payment is made by a customer via card machine, infringed EU competition law from 1992 to 2007.

Such breaches (e.g. anti-competitive agreements with the aim of raising market prices and overcharging customers) often result in a relatively small amount of harm to many consumers, which stacks the odds against any of these individuals successfully bringing a claim against the company or companies responsible. Credit card users are a prime example of this: the Merricks claim estimates that Mastercard's wrongdoing may have cost over 46 million individuals in the UK some hundreds of pounds each, perhaps less. It is clearly not economically feasible for any single individual to bring a claim against Mastercard for their own loss.

Enter Walter Merricks CBE, who is acting as a representative for this defined 'class' of people who have suffered loss, by bringing collective proceedings in the Competition Appeal Tribunal (the "Tribunal").


“Collective proceedings” are either “opt-in” proceedings, to which each class member must actively sign up to participate, or “opt-out” proceedings, where each person within the class is automatically a class member unless they actively choose not to be. These are "opt-out", i.e. Mr Merricks is acting on behalf of all relevant UK consumers to combine their drop-in-the-ocean claims into a wave to be reckoned with.

Early in this process, collective proceedings must be approved by the Tribunal by way of a collective proceedings order (a "CPO"), 'certifying' the proceedings and giving directions for the claim to proceed to a full trial.

Progress on the Merricks case

In order to achieve certification, an applicant for a CPO must satisfy the Tribunal that: 

(i) the proposed class representative is suitable; and

(ii) the claims are “eligible for inclusion” in collective proceedings (including because they raise common issues and are suitable to be brought in collective proceedings).


Mr Merricks first applied for a CPO in September 2016, but the Tribunal judged that the claim had not satisfied the necessary criteria for certification, firstly on the grounds that it was not convinced that Mr Merricks' economic experts would have access to sufficient data to generate a reliable estimate of the degree to which the MIFs were 'passed on' by merchants to consumers. The Tribunal's second ground of refusal to grant the CPO was that damages are primarily intended to compensate the injured party for loss, however, the proposed method for distributing the award of damages to the class members did not take into account loss suffered by individual class members and was therefore not sufficiently 'compensatory'.

The Court of Appeal's view

The Tribunal’s Guide to Proceedings expressly excluded an appeal, other than by way of judicial review. Nonetheless, Mr Merricks took the case to the Court of Appeal, requesting permission to appeal, or, in the alternative, for the decision to be judicially reviewed. The Court of Appeal decided that they could review the Tribunal's decision, and handed down their judgment on 16 April 2019, which was that the Tribunal had set the threshold for certification too high and should hear the application again. Mastercard promptly appealed the Court of Appeal's decision to the Supreme Court, and the recent judgment is the outcome.

What criteria must be met for certification?

The Supreme Court’s decision now provides definitive guidance on the proper approach to an application for a CPO, with the following points being of interest:



The eligibility of the claims for inclusion in class proceedings depends on three conditions set out in CAT Rule 79(1):

a) the proceedings are brought on behalf of an identifiable class of persons;

b) they raise common issues; and

c) they are suitable to be brought in collective proceedings.


Lord Briggs, giving the majority judgment, made clear that in assessing suitability, the Tribunal must do so on a relative basis – i.e. the Tribunal must consider whether collective proceedings are preferable to individual proceedings, rather an assessing suitability in absolute terms. The CPO regime is portrayed as merely a procedural tool for allowing multiple individual proceedings to be dealt with together, and there is no need to impose a higher threshold than would be applied if the claim were brought on an individual basis. Further, the suitability of claims for aggregate damages is not a “hurdle”, but rather a factor for the Tribunal to weigh in the balance whilst making a decision.


It was made clear in Lord Brigg's judgment that there is no requirement at the certification stage for the Tribunal to assess whether the collective claim or the underlying claims would pass any merits test.  The Tribunal has separate power to strike out a claim, or issue summary judgment, so an attack on the merits of the claims prior to certification would need to be made by bringing a strike-out application. This sets a lower bar for certification than the Tribunal or even the Court of Appeal had previously set.

Expert evidence

Expert evidence may play a lesser role in determining an application for certification than had previously been thought.  At the certification hearing, the Tribunal had scrutinised the methodology put forward by the expert witness for Mr Merricks as part of an assessment of whether the infringement had a common impact on the class, in a bid to follow the approach taken in Canadian courts, where the collective actions regime is more established, for example in Pro-Sys Consultants Ltd v Microsoft Corporation [2013] 3 SCC 57, [2013] 3 S.C.R. 477. The test applied in Pro-Sys was that the claimants' proposed expert methodology must be sufficiently credible or plausible to establish some basis in fact for the commonality requirement, which entails offering "a realistic prospect of establishing loss on a class-wide basis". 

Given that the Canadian test effectively sets a merits threshold for the claimants’ expert methodology, this does not square neatly with Lord Briggs’ approach. As a general point, however, the Supreme Court did confirm that Canadian jurisprudence in this area is persuasive in the UK.


Lord Briggs emphasised that the courts must simply do what they can with the evidence they have. The application of this so-called 'broad axe' approach to damages means that claimants who have suffered loss have a right to have their damages quantified, albeit it not necessarily with precision (particularly for an estimated 46 million consumers).  There is no need for distribution of damages to be approached on a compensatory basis, the only requirement being that distribution be fair and reasonable. The gatekeeping function of the Tribunal at the certification stage is not intended to prevent a case from proceeding to trial merely because of difficulties foreseen regarding the quantification of damages. 


The case will therefore return to the Tribunal on 25-26 March 2021 for the application for certification to be heard again. Certification of this claim now seems more likely than not, given the lowering of the relevant thresholds and comments limiting the Tribunal's gatekeeping function. Certification would be a historic outcome and key precedent, since, despite five years having elapsed since the changes in legislation aimed at facilitating collective proceedings, the Tribunal is yet to certify a class action by way of a CPO. Potential collective proceedings have been brought (e.g. Gibson v Pride Mobility Products Ltd (Case No. 1257/7/7/16)), but none have yet been successful. Merricks is the most advanced of a pack of burgeoning collective proceedings, and as such is closely followed by all with an interest in this space.

At present, opt-out collective actions of this type may only be brought in relation to claims for breach of competition law.  However, if they are felt to have been successful in enabling large groups of claimants to obtain redress (in circumstances where this would otherwise have been extremely difficult to achieve), it is possible that the Government could decide to extend them to other areas, such as data protection or consumer law.  If so, then the Merricks litigation could ultimately prove to be the tip of a very large iceberg.




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