The collective legal action against Mastercard, spearheaded by solicitor Walter Merricks, has reached a settlement, contingent on approval from the Competition Appeal Tribunal (CAT).
This landmark case, initiated in 2016, marked the first collective proceedings under the 2015 Consumer Rights Act, pursuing redress for Mastercard’s breach of EU law due to interchange fees on debit and credit cards. These fees purportedly escalated costs for retailers and consumers alike, potentially impacting 46 million consumers.
The settlement, reportedly in the region of £200 million, is significantly less than the initial £10 billion claim valuation. Despite the financial discrepancy, Merricks expresses satisfaction with the outcome, emphasising the anticipated compensation’s significance for class members who opt into the damages distribution.
The legal journey has been complex, with CAT granting a collective proceedings order in May 2022 after a provisional nod in August 2021. Merricks, backed by Innsworth Capital, highlighted the necessity of taking the case through legal channels, including the Supreme Court, to establish effective collective redress practices.
This case underscores the intricacies of litigation financing, with Merricks securing £45 million for personal legal expenses and a variant allowance of £15 million should Mastercard triumph. The CAT has scrutinised the mounting costs throughout the proceedings, recently ordering Mastercard to cover certain procedural expenses.
Meanwhile, the CAT is also reviewing settlements in another significant case involving car delivery price-fixing, where international shipping companies like WWL/EUKOR and “K” Line have proposed settlement terms totalling £38 million.
If the Tribunal approves these settlements, additional compensation could be secured for affected consumers. Mark McLaren, representing the class in the car delivery case, anticipates supporting the settlement terms, stating the necessity of presenting their benefits to the tribunal.
The finalisation of these settlements would not conclude until related trials of other defendants in the car delivery case are resolved, anticipated by January 2025. This strategic pause ensures a fair distribution plan aligns with the class interests, signifying a careful approach to collective redress.
The anticipated approval of the Mastercard settlement by the Competition Appeal Tribunal represents a pivotal moment in collective legal actions, reflecting broader implications for consumer rights and litigation practices.
