Merricks v Mastercard Incorporated & Anor

At certification of opt-out collective proceedings, the proposed representative need show that the claims have a real prospect of success. The expert methodology must be credible and capable of assessing class-wide loss, with relevant data available or likely to be available for trial. It need not establish the final case or support a mini-trial. Under section 47C(2) of the Competition Act 1998, aggregate damages may be assessed top-down without calculating each individual’s loss. Pass-on to consumers generally may constitute a common issue. Neither the Act nor the Rules require distribution of an aggregate award to be based on individual loss. The appeal was allowed and the certification application remitted.

The appellant sought a collective proceedings order under the Competition Act 1998 for a follow-on claim concerning Mastercard interchange fees and alleged consumer pass-on. The proposed opt-out class comprised approximately 46.2 million consumers, with aggregate damages claimed at about £14.098 billion.

The Competition Appeal Tribunal refused certification, holding that there was insufficient data to apply the proposed pass-on methodology and no plausible method of distributing damages by reference to individual loss: [2017] CAT 16. The appeal concerned the correct certification threshold, whether class-wide pass-on could satisfy commonality, and whether distribution had to reflect individual loss.

Appeal allowed. The order refusing certification was set aside and the application for a collective proceedings order was remitted to the Competition Appeal Tribunal for rehearing.

1. At the certification stage, the proposed representative must show no more than a real prospect of success and that the claims are suitable for collective proceedings. The proposed methodology must be credible and capable of assessing loss on a class-wide basis, with data available or likely to become available for trial. The Tribunal must not conduct a mini-trial or require detailed proof of the final evidence before disclosure and expert evidence are complete. The Canadian certification jurisprudence, including Pro-Sys Consultants Ltd v Microsoft Corp [2013] SCC 57, provided useful guidance.
2. Section 47C(2) of the Competition Act 1998 permits an aggregate award without assessing the damages recoverable by each represented person. A top-down calculation of pass-on to consumers generally is therefore permissible. Pass-on to consumers generally is a common issue for the purposes of certification, even though individual spending and loss may differ.
3. The Competition Act 1998 and the Competition Appeal Tribunal Rules 2015 do not require an aggregate award to be distributed according to each claimant’s individual loss. A loss-based distribution may be appropriate where individual loss is readily calculable, but it is not mandatory. Distribution is principally a matter for the trial judge after an aggregate award, and Rule 79(2)(f) does not require the Tribunal to determine the distribution method at certification.
4. The CAT’s approach to the availability and quality of data imposed too high a threshold. Its refusal of certification by reference to the proposed distribution method was also premature and based on a misdirection. A collective proceedings order may subsequently be varied or revoked if the evidence shows that the methodology cannot be operated.

The supplementary expert report was not considered necessary to dispose of the appeal, but could become relevant on rehearing.

• Court of Appeal (Civil Division) — Allowed the appeal, set aside the refusal of certification and remitted the application for rehearing: [2019] EWCA Civ 674.
• Competition Appeal Tribunal — Refused the collective proceedings order on the grounds of insufficient data for the pass-on methodology and the absence of a practicable individual-loss distribution method: [2017] CAT 16.