Litigation funding specialists were rubbing their hands today as the UK’s highest court allowed a class action from 46.2mln claimants against credit card group Mastercard to proceed.
The Supreme Court upheld an appeal court ruling that a previous decision by the Competition Appeal Tribunal (CAT) throwing out the claim had applied the wrong test.
Walters Merricks, a former financial ombudsman, brought the £14bn claim against the credit and debt card group alleging that admin charges levied on purchases were too high and led to people paying higher prices than necessary.
In a statement after the ruling, Merricks said: “Enforcement of fair competition laws is vital for this country’s market economy and companies who break these laws can now expect not only to be fined by the regulator, but to face much bigger bills in redress claims from those they damaged.”
If successful, the case could see consumers getting refunds of about £300 each.
Mastercard said in reply that it ‘fundamentally disagreed’ with the basis of the claim adding that no UK consumer has asked for the claim rather it was being driven by ’hit and hope US lawyers’ and others ‘focused on making money for themselves’.
Litigation funding is a fast-growing type of investment and a flood of new collective claims are expected following the Supreme Court’s ruling.
Michael O’Higgins filled a claim against five banks in 2019 following an EU fine for forex price manipulation.
The certification hearing that would allow this claim to proceed had been postponed pending today’s Mastercard Supreme Court judgment.
In a statement, he said: “We welcome today’s Supreme Court’s decision which recognized that the collective redress regime was intended to provide fair compensation to those that suffered losses as a result of uncompetitive behaviour and we are confident that the UKFXcartel claim will receive certification in due course.”
Neil Purslow, chief investment officer at litigation funder Therium said it had already made significant investments in competition cases but added: “It is very likely that we will be increasing our investment allocation to these types of US-style competition class actions as a result of this decision.”
“If individuals have suffered a loss of a few hundred pounds due to anti-competitive behaviour, it doesn’t make financial sense to bring an individual claim, and today’s decision reflects this commercial reality.”