Fledgling competition tribunal refuses to allow claim relating to 16 years of alleged overcharging to proceed

This article is more than 2 years old

This article is more than 2 years old

A £14bn class-action lawsuit against MasterCard for allegedly overcharging more than 45 million people in Britain over a 16-year period was blocked by a British court on Friday.

The competition appeal tribunal (CAT), a newly empowered court that oversees Britain’s fledgling class action regime, ruled that it would not grant the necessary collective proceedings order for the case to continue to trial.

Had it been allowed to proceed, the case would have been the largest and most complex in British legal history and would have tested the limits of the new Consumer Rights Act, which introduced US-style “opt-out” collective class actions for breaches of UK or European Union competition law in 2015.

MasterCard welcomed the judgment, saying the claim was “completely unsuitable” to be brought under the collective action regime.

A law firm, Quinn Emanuel Urquhart & Sullivan, launched the case on behalf of adults in Britain after MasterCard lost a drawn-out appeal against a 2007 European commission decision that ruled its fees were anti-competitive.

The case centred on so-called interchange fees, the charges levied by credit and debit card companies such as MasterCard on merchants’ banks, which card companies say cover the costs of operating card services, security and innovation.

It alleged these fees were a significant cost for retailers and were passed on through increased prices of goods and services to all UK consumers, including those who paid in cash and not just MasterCard holders.

End of the 'rip-off': all charges for paying by card to be banned Read more

London-based Walter Merricks, a lawyer who once led the Financial Ombudsman Service group that handles consumer disputes with banks and who is the representative named on the proposed action, said he was considering an appeal with his advisers.

“The new collective action regime was introduced by the Consumer Rights Act to overcome the difficulty for consumers seeking to recover losses from competition law infringements,” he said. “I am concerned that this new regime, designed to benefit consumers, may never get off the ground.”

He added that concerns cited by the tribunal, which included the difficulties in providing evidence that MasterCard fees were passed on to consumers and in precisely calculating individual losses for so many consumers, could have been overcome.

The planned lawsuit had been dubbed by one lawyer the “perfect exam question” for Britain’s CAT, nominated in 2015 to oversees the country’s maiden “opt-out” class action lawsuits in antitrust cases.

Under the regime, UK-based members of a defined group are automatically bound into legal action unless they opt out.

Critics say such regimes encourage claims without merit. But others argue they are designed to offer a more effective and economic route to compensation for UK-based consumers and businesses that fall victim to anti-competitive conduct and saves on hefty advertising costs to rally a large group together.

The high court ruled in January that MasterCard had charged interchange fees at a lawful level and without restricting competition in a similar dispute with retailers.</s>A 14 billion pound (US$18 billion) class action lawsuit against MasterCard for allegedly overcharging more than 45 million people in Britain over a 16-year period was blocked from proceeding by a judge, MasterCard said on Friday.

LONDON: A 14 billion pound (US$18 billion) class action lawsuit against MasterCard for allegedly overcharging more than 45 million people in Britain over a 16-year period was blocked from proceeding by a judge, MasterCard said on Friday.

The Competition Appeal Tribunal (CAT) has sided with MasterCard's argument that the claims were unsuitable to be brought under a so-called collective actions regime and has not allowed the case to go to trial, the company said.

"We welcome the Competition Appeal Tribunal's judgment refusing certification for the proposed collective action," a MasterCard spokesman said in a statement.

Had it been allowed to proceed, the case would have been the largest and most complex in UK legal history and would have tested the limits of the new Consumer Rights Act, which introduced U.S.-style "opt-out" collective class actions for breaches of UK or EU competition law in 2015.

U.S.-based litigator Quinn Emanuel Urquhart & Sullivan launched the case on behalf of adults in Britain after MasterCard lost a drawn-out appeal against a 2007 European Commission decision that ruled its fees were anti-competitive.

The case centered on so-called interchange fees, the charges levied by credit and debit card companies such as Mastercard on merchants' banks, which card companies say cover the costs of operating card services, security and innovation.

London-based Walter Merricks, a lawyer who once led the Financial Ombudsman Service group that handles consumer disputes with banks and who is the representative named on the class action, said he was considering an appeal.

He said he was surprised and disappointed at the ruling.

London's High Court ruled in January that MasterCard had charged interchange fees at a lawful level and without restricting competition in a similar dispute with retailers.</s>Campaigners have lost the right to bring a £14bn ($18bn) mega class action suit against MasterCard alleging the US credit card firm had overcharged 46 million people over almost two decades.

The Competition Appeals Tribunal in London threw out the claim agreeing with MasterCard that the grievance was unsuitable to be brought as a collective action suit. This blocks the case from going to court.

The claim against MasterCard is that it allegedly infringed EU competition law by imposing high card charges that were passed on to shoppers over a 16-year period ending in 2008.

MasterCard argued the grievance did not meet the set criteria for a collective action to proceed saying the claim contained a massive class of individuals with disparate claims.

If it had gone to court the case would have been one of the largest and most complex in UK legal history. It would have tested the limits of the Britain' 2015 Consumer Rights Act, which introduced US-style class actions for breaches of British or EU competition law.

The lawsuit alleged that cross-border charges on the use of MasterCard debit and credit cards — known as interchange fees — were a significant cost for retailers. But this cost was then passed on to consumers in the form of higher prices for goods and services, it claimed.

The case was brought forward by US law firm Quinn Emanuel Urquhart & Sullivan after MasterCard lost a 2007 appeal of a European Commission ruling that its fees were anti-competitive.

The firm was retained by Walter Merricks, the UK's former financial ombudsman, who spearhead the class action claim.

Merricks said he was considering an appeal and told the Financial Times he was "surprised and disappointed" by the decision.

He added: "The new collective action regime was introduced by the Consumer Rights Act to overcome the difficulty for consumers seeking to recover losses from competition law infringements. I am concerned that this new regime designed to benefit consumers may never get off the ground."

The number of potential claimants involved in the proposed action was so large because the law allows individuals to be automatically included in this type of litigation unless they opt out.

Campaigners for the class action argued the suit ought to include anyone who bought goods or services from UK businesses that accepted MasterCards between May 1992 and June 2008, provided they were UK residents and aged 16 or over.</s>The U.K.’s Competition Appeals Tribunal put the brakes on a £14 billion ($17.2 billion) consumer antitrust suit against MasterCard over swipe fees on Friday, ruling that the suit cannot proceed as a class action. ...read more</s>A Tribunal Court judge has blocked a £14 billion class action lawsuit against Mastercard for overcharging customers, agreeing that the claims were not suitable under the current collective actions regime.

The decision will be of significant relief to Mastercard given that it was set to be the largest and most complex case in UK legal history, involving 45 million people in Britain over a period of 16 years.

The case would also have tested the parameters of the relatively new Consumer Rights Act which only introduced US-style collective class actions in 2015 for breaches of UK or EU competition law.

In a statement Mastercard said: "We welcome the Competition Appeal Tribunal's judgment refusing certification for the proposed collective action."

The class action was brought by a US law firm, Quinn Emanuel Urquhart & Sullivan, back in 2007 following MasterCard's unsuccessful appeal against a European Commission ruling that its fees were anti-competitive.

More specifically, the case focused on the use of interchange fees charged by numerous credit and debt card companies - fees which the card companies say are charged to merchant banks to cover the cost of innovation, security and operational overheads.

This latest ruling from the Competition Appeal Tribunal follows a High Court ruling back in January in a dispute with retailers that Mastercard's use of interchange fees had been lawful and not anti-competitive.

The class action case may not be over for Mastercard though. The London-based lawyer and named representative for the class action, Walter Merricks, said he was "surprised" and "disappointed" by the ruling and said he was considering an appeal.

Mr Merricks, a former leader of the Financial Ombudsman Service said: "I am concerned that this new regime, designed to benefit consumers, may never get off the ground. The granting of the collective proceedings order in this case would have allowed 46m consumers to recover the losses caused to them by Mastercard’s proven illegal conduct.

"It is, however, unfortunate that the Tribunal considered that it was not satisfied that my experts would be able to get the evidence to show that the illegal fees charged by Mastercard to businesses were then passed on to consumers in the form of higher prices."

Of particular frustration to Mr Merrick was the Tribunal's determination over the inability to accurately calculate the loss suffered by all 46m consumers included in the suit and the result that "consumers should get nothing at all".

"I believe these are matters my advisers could have addressed and overcome had the claim been allowed to proceed. I am actively considering with my advisors and litigation funders the possibility of an appeal," he said.</s>HARRISON (dpa-AFX) - Mastercard Inc. (MA) welcomed a decision by a U.K. court to block a 14 billion pound class action suit against the company that alleged it had overcharged about 46 million Britons over a 16-year period.



The Competition Appeal Tribunal ruled that the case could not proceed through a collective - or class - action. 



The tribunal found that even if a loss had been suffered, and could be estimated across the whole class, there was no way any individual could receive compensation equal to the loss that he or she had actually suffered. The case was filed in September 2016, and followed a European Court of Justice (ECJ) ruling against the level of so-called interchange fees - the amounts that retailers have to pay on debit and credit cards.



It related to the fees charged by Mastercard between 1992 and 2008.



'We welcome the Competition Appeal Tribunal's judgment refusing certification for the proposed collective action. As set out in Mastercard's arguments to date, we believe that the claims were completely unsuitable to be brought under the collective actions regime,' the company said.



Copyright RTT News/dpa-AFX</s>SACRAMENTO — A federal class action claims that Carbonite, the cloud and data-backup service, renews and charges for monthly subscriptions without clear and conspicuous notice.</s>IRVINE, CA / ACCESSWIRE / July 21, 2017 / Khang & Khang LLP (the 'Firm') announces a securities class action lawsuit against Sinovac Biotech Ltd. ('Sinovac' or the 'Company') (NASDAQ: SVA). Investors who purchased or otherwise acquired shares between April 30, 2013 and May 16, 2017 inclusive (the 'Class Period'), should contact the firm in advance of the September 1, 2017 lead plaintiff motion deadline.

If you purchased Sinovac shares during the Class Period, please contact Joon M. Khang, Esq., of Khang & Khang LLP, 4000 Barranca Parkway, Suite 250, Irvine, CA 92604, by telephone: , or by e-mail at joon@khanglaw.com.

There has been no class certification in this case yet. Until certification occurs, you are not represented by an attorney. You may also choose to take no action and remain a passive class member.

According to the Complaint, throughout the Class Period, Sinovac made false and/or misleading statements and/or failed to disclose: that Chairman and CEO Weidong Yin bribed a member of the Chinese Food and Drug Administration to assist Sinovac's vaccine clinical trial and approval; that such conduct would subject the Company to heightened regulatory scrutiny; thus, Sinovac's public statements were materially false and misleading at all relevant times. When this information reached the public, shares of Sinovac declined in value materially, which caused investors harm according to the Complaint.</s>A proposed £14 billion class action lawsuit against Mastercard will not proceed after a tribunal ruled the case cannot go to trial.

The claim by former financial ombudsman Walter Merricks, relating to the card giant's interchange fees, was lodged on behalf of around 46 million consumers.

It alleged that the fees effectively resulted in consumers paying higher prices to businesses that accept Mastercard over a 16-year period, therefore beaching EU competition law.

The damages being sought were more than £14 billion, but the Competition Appeal Tribunal said the case could not proceed through a so-called collective action.

The tribunal found that even if loss had been suffered and could be estimated across the whole class, there was no way of ensuring that an individual would receive an amount compensating for any loss suffered.

Mastercard said in a statement: "We welcome the Competition Appeal Tribunal's judgment refusing certification for the proposed collective action.

"As set out in Mastercard's arguments to date, we believe that the claims were completely unsuitable to be brought under the collective actions regime. The tribunal sided with this position.

"We firmly believe that consumers derive real value from our network through the benefits of security, convenience and consumer protection, and we remain committed to investing in our services in order to continue to meet the rapidly evolving needs of all our customers."</s>IRVINE, CA / ACCESSWIRE / July 21, 2017 / Khang & Khang LLP (the 'Firm') announces a securities class action lawsuit against Mazor Robotics Ltd. ('Mazor Robotics' or the 'Company') (NASDAQ: MZOR). Investors who purchased or otherwise acquired shares from November 8, 2016 through June 8, 2017, inclusive (the 'Class Period'), are encouraged to contact the Firm before the August 8, 2017 lead plaintiff motion deadline.

If you purchased shares of Mazor Robotics during the Class Period, please contact Joon M. Khang, Esq., of Khang & Khang LLP, 4000 Barranca Parkway, Suite 250, Irvine, CA 92604, by telephone: , or by e-mail at joon@khanglaw.com.

There has been no class certification in this case yet, and until certification occurs, you are not represented by an attorney. You may also choose to take no action and remain a passive class member.

The Complaint alleges that throughout the Class Period, Mazor Robotics made false and misleading statements and/or failed to disclose: that the Company was engaged in conduct that subjected it to an Israeli Securities Authority ('ISA') investigation and exposed it to potential liability; and that as a result, the Company's statements about its business, operations, and prospects, were false and misleading and/or lacked a reasonable basis. On June 8, 2017, Mazor Robotics disclosed that in May 2017, the ISA searched its offices and questioned certain of its officers regarding an investigation. When this news was announced, the Company's stock price fell materially, which harmed investors according to the Complaint.
A United Kingdom court blocks a £14 billion class action lawsuit against MasterCard.