A London court on Wednesday approved a £10 billion-plus ($14 billion-plus) class action against global payments processor Mastercard (MA.N) that claimants said could entitle 46 million British adults to roughly £300 each if it is successful.
The decision to finally authorise the five-year case as a collective action establishes a standard for a string of other proposed class actions that have been stalled in its wake.
“The tribunal’s ruling heralds the start of an era of consumer-focused class actions which will help to hold big business to account in areas that really matter,” commented former financial ombudsman Walter Merricks, after the UK Supreme Court overruled objections to the class action suit in December.
The Competition Appeal Tribunal allowed the case to proceed to trial as the first mass claim to be launched under the Consumer Rights Act 2015. The legislation is intended to compensate consumers and small businesses for anti-competitive behaviour.
“Mastercard has thrown everything at trying to prevent this claim going forward, but today its efforts have failed,” Merricks said in a statement.
Mastercard said the “spurious” claim was being driven by lawyers and backed by organisations “primarily focused on making money for themselves”.
Merricks alleges Mastercard charged excessive “interchange” fees – the fees retailers pay credit card companies when consumers use a card to shop – between May 1992 and June 2008 and that those fees were passed on to consumers as retailers raised prices.
But Merricks failed to expand the scope of the case by adding the estates of the deceased and compound interest to the claim. Mastercard said this reduced the claim’s size to around 10 billion pounds. The claimants put it at 15 billion pounds.
“The decision today reduces the value of this spurious claim by more than 35 per cent,” Mastercard said in a statement.
“Mastercard is confident that over the coming months a review of key facts will further significantly reduce the size and viability of the claim.”