[co-author: Amanpreet Deusi]
In a watershed judgment handed down on 11th December 2020 the UK Supreme Court gave the go ahead for a £14 billion collective proceedings damages claim for breach of competition law against card issuer, Mastercard. This will be the largest class action to date in the UK.
The central issue was whether it was appropriate for the Courts to certify a collective proceedings action (and therefore allow it to procced to trial) where:
- the class representative was claiming an aggregate award on behalf of the entire class instead of damages for each individual class member; and
- each member of the class would receive a fixed sum from the aggregate award regardless of the potential loss they had each suffered during the infringement period.
[co-author: Henry Gafsen]
In a key decision, the UK Supreme Court has given guidance on the threshold for certifying a class action for breach of competition law. The Court’s judgment in
Mastercard v Merricks will make it easier to obtain class certification and will likely encourage a significant increase in class actions in the UK.
On 11 December 2020 the UK Supreme Court gave judgment in
Mastercard v Merricks. The appeal is the first time the Supreme Court has considered the test for whether a class action should be certified. The UK class action regime, which applies to claims for breach of competition law, allows opt-out or opt-in class actions and was introduced in 2015.
Surveys and Reports
Regulatory Developments
United Kingdom: HM Treasury consultation on new special administration regime for payment institutions and electronic money institutions
On 3 December 2020 HM Treasury (HMT) issued a consultation on proposed insolvency changes for payment institutions (PIs) and electronic money institutions (EMIs), including a bespoke special administration regime (SAR). HMT notes the shortcomings of the current insolvency regime and is making these proposals ahead of the conclusion of the Payments Landscape Review to protect consumers in the event of the insolvency of PIs and EMIs.
The proposed SAR is intended to have the following key features:
An explicit objective on the special administrator to return customer funds as soon as reasonably practicable.
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In a landmark judgment (and in unusual circumstances), the UK Supreme Court has held that the ongoing Merricks v Mastercard case should be referred back to the Competition Appeal Tribunal (CAT). Not only is this a step towards Merricks claim that interchange fees were an invisible tax on UK consumers being heard in court, but – more importantly – it is also likely to have a significant impact on UK collective proceedings for years to come.
Background
The roots of the case go back to 2007, when the European Commission found that Mastercard s multi-lateral interchange fees were anti-competitive. Interchange fees are the fees paid by businesses when transactions are made using a Mastercard, which ultimately, it was held, resulted in higher prices being charged to consumers. This finding led Walter Merricks, the former Chief Ombudsman of the Financial Ombudsman Service, to start a claim in the UK. Acting as a propos
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