Supreme Court dismisses Mastercard’s appeal in landmark judgment on proposed collective proceedings

11/12/20

The Supreme Court has given judgment in the Merricks v Mastercard proceedings.  The Court has dismissed Mastercard’s appeal against the judgment of the Court of Appeal, which in turn allowed Walter Merricks CBE’s appeal against the Competition Appeal Tribunal’s (the ‘Tribunal’) judgment refusing to grant a Collective Proceedings Order (‘CPO’).  Mr Merricks seeks to represent a class of some 46 million people, in a claim that he estimates is worth some £14 billion. 

The appeal before the Supreme Court was heard in May 2020 by a 5 judge panel, composed of Lord Kerr, Lord Briggs, Lord Sales, Lord Leggatt and Lord Thomas.  After the hearing, but before judgment was given, Lord Kerr sadly died.  The President of the Supreme Court, Lord Reed, then made a direction under section 43 of the Constitutional Reform Act 2005 reconstituting the Court as Lord Briggs, Lord Sales, Lord Leggatt and Lord Thomas.

Mastercard raised two grounds of appeal: first, that the Tribunal had been entitled to find that Mr Merricks had not shown that there would be sufficient data for his proposed methodology for calculating damages on an aggregate basis across the class to be workable; and second, that the Tribunal was entitled to have regard to the fact that the distribution of any aggregate damages award would not bear any relation to the compensatory principle (ie, in a manner bearing some relation to the actual loss of individual class members).  Mastercard thereby sought to have the Tribunal’s dismissal of the application for a CPO affirmed.

The Court gave two judgments.  Lord Briggs (with Lord Thomas agreeing) found that the Tribunal had erred in its approach to assessing Mr Merricks’ proposed method of assessing damages on an aggregate basis across the class, and so rejected Mastercard’s first ground of appeal.  Lord Briggs also found that the Tribunal had erred as it directed itself that an aggregate damages award had to be distributed on a compensatory basis, and so dismissed Mastercard’s second ground of appeal. 

Lord Sales and Lord Leggatt broadly agreed with Lord Briggs as to the second ground of appeal, finding that the Tribunal had misdirected itself by finding that an aggregate damages award would have to be distributed on a compensatory basis.  As to the first ground, Lord Sales and Lord Leggatt agreed with Mastercard that the Tribunal had been entitled to find that the claims were not suitable for an award of aggregate damages, and so for that reason were not suitable to be brought in collective proceedings.

However, Lord Sales and Lord Leggatt further stated that prior to his death, Lord Kerr had expressed his agreement with the judgment of Lord Briggs and would have been recorded as agreeing with it.  Lord Sales and Lord Leggatt held that if the Court was left evenly divided, re-argument of the case would be necessary before a different constitution, which they considered would be wasteful of resources and would not be a just outcome.  Their Lordships therefore agreed that Mastercard’s appeal should be dismissed.

Mr Merricks’ application for a CPO has therefore been remitted to the Tribunal.

The judgment is here.