UK Supreme Court Opens The Floodgates For Mass Consumer Actions



[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.

The Supreme Court answered both the above points in the affirmative.

The decision in this case breathes new life into the English collective proceedings’ regime in the Consumer Rights Act 2015. It will unblock a number of collective proceedings actions currently stayed before the Courts awaiting the Supreme Court’s ruling. It will also give the green light to future mass collective proceedings which seek an aggregate award and where the members of the class each receive an award which may differ from their actual loss.


The Consumer Rights Act 2015 had introduced a refreshed collective proceedings regime in the UK and amended the Competition Act 1998 (“the Act”). Actions for competition law breaches could be commenced in the Competition Appeals Tribunal (“CAT”) by an appropriate representative acting for a class of claimants, provided the CAT approves such a class action.

Section 47B of Act states that the CAT may make a collective proceeding order only:

(a) if it considers that the person who brought the proceedings is a person who, if the order were made, the CAT could authorise to act as the representative in those proceedings in accordance with subsection (8) [just and reasonable person to bring the claim], and

(b) in respect of claims which are eligible for inclusion in collective proceedings.

S47B(6) of the Act further states that “Claims are eligible for inclusion in collective proceedings only if the CAT considers that they raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings”.

In 2016, former financial ombudsman, Walter Merricks, brought collective proceedings on behalf of 45 million UK resident Mastercard cardholders under the collective proceedings’ provisions of the Act, seeking an award of damages for the whole class (an aggregate award), rather than damages for each individual class member. The claim arose out of a 2007 European Commission decision under which the Mastercard payment organization, consisting of several thousand financial institutions, was held to be an association of undertakings that had infringed Article 101(1) TFEU (Article 81(1) EC as it was then) by fixing a high default “multilateral interchange fee” which applied to cross border transactions between May 1992 and December 2007. This was a fee paid by the retailers to Mastercard for use of their payment card network.

The CAT refused to certify the collective proceedings action on the basis that claims were not suitable for an aggregate award of damages and the proposed distribution of any award did not satisfy the compensatory principle in common law.

Merricks appealed to the Court of Appeal which found in his favour. Mastercard in turn appealed to the UK Supreme Court.

The Supreme Court dismissed Mastercard’s appeal and remitted the case back to the CAT for certification. The Court held that the CAT had erred in law for a number of reasons. The principal grounds for which the Supreme Court approved certification were as follows.

The “Broad Axe” Principle: Courts frequently must deal with difficult issues in calculating damages. Courts do not deprive an individual claimant of a trial merely because of these quantification issues, provided there is a triable issue that the claimant has suffered more than nominal loss. If these 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

The Court stated that it is a fundamental requirement of justice that the court must do its best on the available evidence to calculate damages with the information available. This was the “broad axe” principle, and it applied to competition cases.

The Supreme Court held the CAT had erred in considering that difficulties with incomplete data and interpreting that data was a good reason to refuse certification. Civil courts and tribunals frequently face problems with quantifying loss and the CAT owes a duty to the class to carry out the task in a case of proven breach of statutory duty coupled with a realistically arguable case that some loss was suffered.

Act Dispenses with Common Law Compensatory Principle in Collective Proceedings: - The Court held that the CAT was wrong to require Merricks’ 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 expressly modifies the ordinary requirement for the separate assessment of each claimant’s loss (Section 47C of the Act).

In short, the Supreme Court’s decision clarifies the manner in which certification may proceed, with important implications for future collective proceedings (and the approach to damages) in the competition space. It may be expected to prompt a renewed appetite for pursuing mass collective proceedings in the CAT.


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