UK Court Prevents Class-Action Lawsuit Against Mastercard

A $18-billion class-action lawsuit lodged against Mastercard for overcharging consumers in the U.K. was prevented by a court in Britain.

According to a report in Reuters, the Competition Appeal Tribunal ruled that it won’t allow the case to proceed to trial. Had it ruled in favor of the consumers it would have marked the largest and most complicated suit in the history of the U.K., reported Reuters. It would have also tested the power of the Consumer Rights Act, which is new.  

In a statement, Mastercard said the claim was “completely unsuitable” to be brought under the collective action regime. Under the rules of the regime, U.K.-based members are bound by legal action unless they opt out, noted the report. Reuters noted critics contend regimes like that encourage claims without any merit, but supporters said they provide a better route to compensate U.K. consumers and businesses that are the victims of anticompetitive conduct.

The case was launched by Quinn Emanuel Urquhart & Sullivan on behalf of adults in U.K. and following on the heels of Mastercard losing an appeal against a 2007 European Commission decision that ruled the fees it charges were anti-competitive.

“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,” Walter Merricks, a lawyer who once led the Financial Ombudsman Service, told Reuters. “I am concerned that this new regime, designed to benefit consumers, may never get off the ground.”  

Merricks noted the concerns brought up by the tribunal such as difficulties providing evidence that the Mastercard fees were passed on to consumers and calculating individual losses could be overcome. Back in January, the U.K.’s high court ruled that the fees Mastercard charges were at a lawful level and that it didn’t restrict competition with disputes over fees with retailers.