A huge potentially very damaging class action against Mastercard for £14 billion for allegedly charging people too much over a 16 year duration has been blocked by the courts this week.
It all happened in a CAT or “Competition Appeal Tribunal” which is a new court style that has been charged with overseeing the UK’s burgeoning class action law scheme. They specified that they would not be allowing the requisite collective proceedings order that the case needed to go to trial.
If it had been allowed to move forward, the lawsuit would have the biggest and the most complex in British legal history , whilst also testing the Consumer Rights act , which has introduced the USA originating class actions for breaching UK/EU law in 2015.
Mastercard, not surprisingly, was happy with this judgement and had said the claim was “completely unsuitable” to be launched under the collective action legislation.
The law firm Quinn Emanuel Urquhard and Sullivan originally launched the case on behalf of the plaintiffs which came after Mastercard lost a long running appeal against an 07 EU decision that had ruled it’s fees were anti competitive.
The case revolved around interchange fees, and alleged that these fees were being passed on to consumers in more expensive goods and services. The fees are used by such credit and debit card companies to cover the costs of operating the card services, innovation and also security.
Group action lawsuits are becoming much more commonplace in the UK according to Slater and Gordon. This is because they are a way for people with similar complaints to collaborate and avoid the downfalls that are associated with people making seperate claims, primarily risk and cost. IN summary they offer a strength in numbers angle and a large saving on the actual costs for the legal action.
To actually enter into a litigation can be a worrying time for many people and in the past there have been many who had valid complaints who were too nervous to take the plunge. This was mainly because of the risk of litigating against a defendant who is usually very big and well financed. Group litigation essentially changes this dynamic and means that the average person can become powerful and well funded when part of a large group. This is well fitting to the David v Goliath analogy.
When a group is formed, there is a strength formed in the comon purpose and sharing of information. Likewise costs and risk are shared too and these benefits are very strong and allow a case to be made by individuals who could never afford to bring one alone.