Dispute resolution

A reprieve for opt-out class actions in the UK

Published on 11th Dec 2020

The Supreme Court's decision in the Merricks v Mastercard litigation opens the door for more mass claims to be brought on behalf of large classes of consumers


In a split 3-2 judgment, the Supreme Court has dismissed Mastercard's appeal regarding the test to be applied when approving collective proceedings in an 'opt-out' collective competition damages claim.  In dismissing the appeal, the Supreme Court concluded that Competition Appeal Tribunal's approach had been too restrictive.

The judgment will be seen as paving the way for an increase in opt-out collective actions in the UK (in competition law claims).

What was the dispute about?

In September 2016, following a European Commission decision that certain of Mastercard's multilateral interchange fees (MIFs) had been set at an unlawfully high level for a period of 16 years, Mr Merricks, the Claimants' class representative,  applied to the Competition Appeal Tribunal (CAT) to bring an opt-out collective action on behalf of a class of 46 million credit and debit card holders. The individual recovery for the class was estimated to be in the region of £300, but the overall recovery for the class as a whole was some £14bn.  As part of this claim, Mr Merrick's applied to certify the class of Claimants by way of a Collective Proceedings Order (CPO).

In July 2017, the CAT refused to certify the class with a CPO on the basis that the claims were not suitable for collective proceedings.  The CAT was concerned that the claims were not suitable for an aggregate award of damages due to the insufficient availability of data to quantify damages. It also considered that the distribution of any award would run contrary to the common law compensatory principle – in essence, any distribution would be on a per capita basis and would not reflect the actual harm suffered by each consumer.

What did the Supreme Court decide?

In a highly anticipated judgment, the handing down of which had been delayed following the death of Supreme Court Justice Lord Kerr in December 2020, the Supreme Court found in Mr Merrick's favour. Affirming the decision of the Court of Appeal, the Supreme Court found that the CAT's approach to the class certification process contained a number of errors of law.  The Supreme Court confirmed that CPOs could not be denied on the basis that there would be "forensic difficulty" in quantifying the damages at the conclusion of the trial. The court emphasised that it is a principle of justice that claimants are entitled to "have their damages quantified by the court doing the best it can on the available evidence" and that this principle is in no way "watered down in collective proceedings".

Importantly, it also concluded that the compensatory principle is "expressly, and radically, modified" by collective proceedings.  Section 47C of the Competition Act 1998 removes the requirement for a separate assessment of each Claimant's loss in a class of Claimants.  The only requirement is that the assessment of the Claimant's loss should be "just" in the sense of it being fair and reasonable.

Finally, the Supreme Court stressed that the certification process should not require an analysis of the merits of the case: if one of the parties wishes to challenge the merits, the correct process to use is for the party to make a strike out or summary judgment application.

On this basis, the Supreme Court refused Mastercard's appeal and remitted the application for the CPO to the CAT to reconsider.


In dismissing the appeal, the Supreme Court did not certify the class of Claimants in Merricks, it merely returned the question of certification to the CAT for reconsideration.  It is therefore still open to the CAT to refuse to certify the class on the basis of the certification test as clarified by the Supreme Court.

However, those wishing to bring class actions will be encouraged by:

  • the court's comments regarding the qualification of the compensatory principle in collective damages claims; and
  • the court's confirmation that difficulties in quantifying the claim with any degree of accuracy are no bar to certification of the claim.

The judgment will also "unlock" existing competition collective actions (such as the Forex claims) that have been on hold pending the outcome of Merricks.

The Supreme Court, in reaching its judgment, will have had in mind public policy considerations. The opt-out collective actions regime was introduced by the Consumer Rights Act expressly to make collective competition damages claims more viable in the UK. This decision will help to ensure the regime serves its intended purpose.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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