The massive U.K. collective lawsuit against Mastercard will return to the Competition Appeal Tribunal for further proceedings as a result of the December 11, 2020 Judgement of the U.K. Supreme Court. The high-profile lawsuit is the first under the U.K.’s recently adopted opt-out collective action procedures for consumer protection claims. The case is also the first collective action proceeding to reach the U.K Supreme Court. The Court’s judgment sets out important guidelines and principles for collective action proceedings. The Court’s December 11, 2020 Judgment can be found here. A written summary of the Court’s Judgment can be found here, and a video summary of the Judgment delivered by Lord Michael Briggs can be found here.



In 2015, the U.K. Parliament enacted The Consumer Rights Act of 2015, which represented a comprehensive overhaul of the U.K.’s consumer protection and unfair trade practices laws. Among many other changes, the Act introduced an “opt-out” collective action mechanism. In particular, the Act broadens the jurisdiction of the Competition Appeal Tribunal, including the introduction of procedures for the tribunal to hear damages claims on an “opt-out” collective action basis. The Act also includes provisions for collective settlements and collective redress schemes.


As discussed here, in July 2016, Walter Hugh Merricks, a representative claimant, represented by the U.S-based law firm Quinn Emmanuel and financed by a U.S.-based litigation funding firm, initiated proceedings against Mastercard in the Competition Appeal Tribunal (CAT) behalf of U.K. consumers under the Consumer Rights Act.


The CAT action against Mastercard was filed in reliance upon the November 2014 ruling of Europe’s top court, the European Court of Justice (ECJ), in which the ECJ dismissed the appeal of Mastercard and related entities in a regulatory proceeding alleging MasterCard had charged improper fees. The ECJ’s dismissal of Mastercard’s appeal left standing the General Court of the European Union’s determination that MasterCard had over a 16- year period used its predominant position in the consumer credit card market to extract excess “interchange fees” from cardholders (costs imposed on retail businesses in order to be able to accept the credit cards and have their transactions processed; the fees are incorporated into the price consumers pay for goods and services). The CAT action was filed on behalf of over 46 million U.K. consumers who had used the MasterCard for purchase transactions and seeks damages of “as much as £19 billion.”


As required under the Consumer Rights Act, the claimant filed an application to the CAT for a Collective Proceedings Order, to enable the continuation of collective proceedings on an opt-out basis. Mastercard opposed the application. As discussed here, in a July 21, 2017 Judgment, the CAT dismissed the application for a Collective Proceedings Order, finding that the claims were not suitable for an aggregate award of damages and that the proposed distribution of any award did not satisfy the compensatory principle in common law.


However, on July 4, 2018, the Court of Appeal reversed the CAT’s ruling, finding that the CAT had made errors of law. Mastercard appealed to the U.K. Supreme Court.


The U.K. Supreme Court’s December 11, 2020 Judgment

In a December 11, 2020 Judgment given by Lord Michael Briggs, the U.K. Supreme Court dismissed Mastercard’s appeal. In issuing its Judgment, the Court noted that this action is the first collective proceedings case to reach the U.K. Supreme Court, noting further that the Court’s Judgment addresses important questions about the legal requirements for the certification of a claim.


In considering the issues presented, the Court noted that collective proceedings are a special form of civil procedure, “designed to provide access to justice and ensure the vindication of private rights where an ordinary civil claim would be inadequate for that purpose.”


An “important element” to the background of collective proceedings relevant to the U.K. Supreme Court’s consideration of the issues presented is that courts frequently have to deal with difficult issues in calculating damages, yet courts do not deprive individual claimants of a trial remedy merely because of these quantification challenges. If these damages quantification issues “would not have prevented an individual consumer’s claim from proceeding to trial, the CAT should not have stopped the collective proceedings claim at the certification phase.” Justice, the Court said, “requires that damages be quantified in order to vindicate a claimant’s right and to ensure that a defendant pays to reflect a wrong done, especially where anti-competitive conduct may never otherwise be restrained if individual consumers are unable to bring claims.”


Another “important element” of the Court’s consideration of the issues presented has to do with the meaning of the term “suitable” within the statutory procedural scheme requiring claims to be “suitable” to be brought in collective proceedings and “suitable” for an award of aggregate damages. “Suitable,” the Court said, mean “relative to individual proceedings”; accordingly, the CAT should have inquired whether the claims were “suitable to be brought in collective proceedings as compared to individual proceedings, and suitable for an award of aggregate damages as compared to individual damages.”


In light of these background considerations, the Court found that the CAT made five errors of law in dismissing the application for the Collective Proceedings Order.


First, the CAT failed to recognize the existence of certain common issues (such as the so-called merchant pass-on issue), which the Court called “a powerful factor in favor of certification.”


Second, in denying certification, the CAT placed great weight on its conclusion that the case is not suitable for aggregate damages; the Court said that while this issue is “a relevant factor for certification,” it is “not a condition.”


Third, the CAT, the Court said, should have applied a “test for relative suitability,” based on a consideration of whether “forensic difficulties” would or would not have sufficient to deny a trial for an individual claimant; if the difficulties “would have been insufficient to deny a trial to an individual claimant, the should not have been sufficient to deny certification for collective proceedings.


Fourth, and what the Court called “the most serious error,” the CAT was wrong to “consider that difficulties with incomplete data and interpreting the data are good reason to refuse certification.” Courts frequently face problems quantifying loss and the CAT “owes a duty to the class” to carry out the task in a case of “proven statutory duty coupled with a realistically arguable case that some loss was suffered.”


Fifth, the CAT was wrong to require the proposed method of distributing aggregate damages to take account of the loss suffered by each class member. A central purpose of the power to award aggregate damages in collective proceedings is to avoid the need for individual assessment of loss and the Act modifies the ordinary requirement for the separate assessment of each claimant’s loss.


On these bases, the Court sent the claimant’s application for a CPO back to the CAT. Merricks will now return to the Competition Appeal Tribunal and attempt to persuade the panel to allow his claim to go forward.


One twist that preceded the Court’s issuance of its Judgment was the untimely death of Justice Brian Kerr on December 1. 2020. Prior to Justice Kerr’s death, the panel was prepared to hand down its ruling dismissing Mastercard’s appeal on a 3-2 vote. After Justice Kerr’s death, the two dissenting Justices, in light of the expense and inefficiency that would have been involved in rehearing the matter, agreed to support the majority. However, the dissenting opinions were published as part of the court’s judgment.



The U.K. Supreme Court’s decision on this appeal is an important milestone in the development of collective action mechanisms in the U.K. The Court’s reasons for judgment are premised on a recognition that the purpose of the collective action procedures in provide redress to aggrieved parties in circumstances where it simply would not be possible for claimants proceeding individually to redress harms. The Court’s decision provides significant guidance for courts to use in future collective action proceedings.  The Court’s Judgment in this case also represents a significant judicial reinforcement of the collective action principles embodied in the Consumer Rights Act of 2015, which is of particular importance given the opt-out feature of the Act’s collective action mechanism.


In that regard, it is important to note that the Act is not the only recent statutory initiative in the U.K. to advance the prospective use of opt-out class action procedures. In addition there has been the introduction in Scotland of the Civil Litigation (Expenses and Group Proceedings)(Scotland) Act 2018, which will allow Scottish Courts to make opt-in and opt-out procedures available for all types of claims. The new Scottish Act enacts a new “group procedure” that includes both opt-in and opt-out processes. The new opt-out processes will permit actions on behalf of all claimants domiciled in Scotland (who do not proactively opt-out) and and claimants outside Scotland who proactively choose to opt-in.


Taken together, these developments (including significantly, the Supreme Court’s recent judgment in the MasterCard case) represent important steps in the evolution of collective action procedures in the U.K.


The procedures available under the Consumers Rights Act are restricted to consumer redress actions for alleged violation of competition laws. However, the Scottish Act is not so restricted. The availability of these mechanisms raises the possibility that the procedures could be extended to further areas of the law in England and Wales, as well as in Scotland. None of these procedures have yet been extended to collective investor actions, and the extension of the procedures to investor actions in England and Wales would require further statutory reform. However, as these procedures become more developed and more familiar, aggrieved parties seeking redress of grievance and their advocates may well be able to advance this type of reform.


All of these developments arise in the context of a wider global rise of collective redress mechanisms. As noted here, in 2018, the European Commission set out a new directive on collective redress as part of the “New Deal for Consumers.” The directive sets out minimum standards for collective redress in EU member countries. As noted here, this initiative recently advanced toward finality with the European Council. The point that should not be overlooked here is that, though the developments are gradual and are taking place over time, there is a definite, measurable movement toward the adoption of collective action procedures, with important implications for prospective claimants and potential corporate defendants alike.


These developments also arise in the context of yet another important global litigation trend, which is the rise of third-party financing. In that regard, it is important to note, as I noted at the time when the Mastercard action was first launched, that the U.K. Mastercard consumer competition claim is significantly supported by a third-party litigation funding firm (and being led by a U.S.-based law firm). Indeed, it could be argued that the global rise of collective actions and the rise of third-party litigation funding are complementary trends. Taken collectively, the two trends are driving what is by far the most significant developments on the global litigation scene.