UK: Lessons from the Competition Appeal Tribunal Hearings in Merricks v. MasterCard and Gibson v. Pride Mobility Scooters

The UK held the first two hearings under its new opt-out class action procedure. The precise rules governing UK class actions will be developed over time from the general guidelines in the statute. There are significant similarities between the U.S. and UK rules on a number of topics related to collective proceedings, and barristers and judges alike cited U.S. law at the recent hearings. The critical questions faced by plaintiffs and their experts at the hearings reflect significant hurdles for the plaintiffs and insights about future claims that might face an easier path to continue as collective proceedings. Additionally, the UK's current rules allow only competition law claims to proceed as class actions, but class actions may be available for other types of substantive legal claims in the future.

Executive Summary

The UK Competition Appeal Tribunal ("CAT") recently heard its first two Collective Proceeding Order ("CPO") applications for competition law cases. The 2015 UK Consumer Rights Act ("the Act") provides the first-ever opt-out class action procedures available in the UK. The Act imposes requirements very similar U.S. class action procedures, and although currently limited to competition law claims, UK authorities may extend its use to other types of claims in the future. The first two CPO application hearings provide insights into problems facing plaintiffs, and where they may turn in future cases.

The CAT held a CPO application hearing in the first case filed – Gibson v. Pride Mobility Scooters on December 16-18, 2016. The plaintiff in that case sought to obtain a CPO for a class comprising all persons who bought a scooter made by Pride in a two-year class period. UK authorities had determined that Pride entered unlawful agreements with eight retailers to restrict advertising below certain prices. A summary of the case is available here.

The second case – Merricks v. MasterCard – is the largest case ever filed in the UK, with the plaintiff seeking £14 billion on behalf of a class of 40 million UK residents over an 18-year class-period. The EC issued a decision in 2007, finding that MasterCard's interchange fees – imposed by credit card companies on retailers for credit and debit card transactions – restricted competition between the merchant's banks (the acquiring banks), and increased the cost of card acceptance for MasterCard (resulting in an overcharge to retailers and consumers), and that there were no procompetitive benefits of proven efficiencies. The public enforcement has already brought about several private actions, including Sainsbury's v. MasterCard, which resulted in a £68.6 million award, plus interest. A summary of the case is available here. The class proposed in Merricks included consumers who allegedly suffered an overcharge because of retailers passing through the supra-competitive interchange fees. The large size of the class and the need to establish a pass-through rate created significant difficulties for the plaintiffs, as evidenced in the January 18-20, 2017, CPO hearing.

The Act Imposes Requirements Similar to Rule 23 Class Certification Standards

The Act allows parties to bring competition law claims as collective proceedings, but only if they establish specific requirements – including the commonality of class members' claims and the suitability of collective proceedings to resolve the dispute (as well as the existence of a discernible class). These standards parallel the commonality and predominance requirements of Rule 23 of the U.S. Rules of Civil Procedure. At the CPO hearing in the £14 billion Merricks v. MasterCard case, both the barristers and the CAT judges cited and relied upon U.S. and Canadian precedent. The parties and judges looked to U.S. law to determine the appropriate ways to balance a fair and precise calculation and apportionment of damages, with the practical difficulties that increase as greater precision is required. Fashioning such standards requires a complex weighing of various interests and considerations of economic theory and practical administration. Further, once these standards are developed, they will likely require robust, expert testimony, similar to that used in class certification in the United States.

At the Merricks v. MasterCard hearing, for example, the CAT inquired what could be done to allocate damages among class members if the case were successful and an aggregate damages award were rendered. Plaintiff's expert largely deferred to the U.S. practice of relying on claims administrators to make these determinations, acknowledging that the distribution of damages to class members would be relatively imprecise. Judge Roth again expressed his belief that even at the CPO application stage, it was relevant to consider whether there was a methodology that could fairly apportion damages. Thus, having the ability, experience, and foresight in U.S. class actions (and class actions generally) will be important and invaluable in navigating class actions in the UK.

Opt-Out Class Actions May Spread to Other Claims in the UK

The Act only authorized opt-out class actions for competition law claims. If proceedings cannot be brought on an opt-out basis, organizing and motivating people to sign on to an opt-in class action is very difficult, which makes opt-in procedures relatively unattractive and ineffective. The UK moved slowly and deliberately in making opt-out collective proceedings available, in part because of fears that plaintiffs would bring a flurry of lawsuits, some of them lacking merit, in the hopes of attracting a large settlement. However, the rules under the Act build in several protections that supplement other features of UK law that disincentivize filing non-meritorious suits. These include the "loser pays" rule, requirements that litigation funders show they have adequate insurance to pay the other party's attorney's fees, and the lack of treble or punitive damages. However, the Act does allow for interest and pass-through damages claimed by indirect purchasers (unlike the U.S. federal antitrust rules). Further, the increased activity of professional litigation funders in the UK is making the loser-pay requirements less important. The Act also vests the CAT with discretion to allow a case to proceed as either an opt-out or an opt-in collective proceeding. A key question is whether the Act is a precursor for further UK acts authorizing class actions beyond competition and antitrust.

As the CPO standards are developed in the first few competition law cases, there may be desire within the UK to expand the use of these procedures to other types of substantive claims for which collective proceedings may be workable.

Additional Competition Claims Under the Act

During the Merricks hearing, the CAT judges expressed concern that the class may be too unwieldy to continue as a collective proceeding. A particular problem facing the Merricks plaintiffs is how to determine the appropriate pass-through rate (i.e., how much of the overcharge suffered by retailers was passed on to consumers), given the different spending habits of the 40 million-member class. In the Sainsbury case, MasterCard argued that the pass-through rate approached 100 percent, and although the Merricks plaintiffs noted the tension between MasterCard's Sainsbury argument and its position in Merricks that the pass-through rate was variable and lower, the CAT did not view MasterCard's position in earlier cases as a substitute for robust expert analysis.

The plaintiffs in Merricks appeared to face significant difficulties because of the heterogeneity of the class, and the amount of damages sustained by individual class members. There is extraordinary variability in the ways that class members used MasterCard credit and debit cards – both in terms of the amount of interchange fees incurred, the types of purchases made, and the average pass-through rate incurred by individual class members. This variability is a significant challenge that had led the CAT to question whether there is sufficient commonality and whether a collective proceeding is suitable.

Plaintiffs, attorneys, and litigation funders may take aim at targets less likely to face these problems to the same degree, focusing on products and services that are more homogenous and more readily susceptible to reliable pass-through determinations and administrable distribution of damages. These concerns indicate that although the CAT may not allow the Merricks v. MasterCard case to continue as a collective proceeding, plaintiffs may have more success in cases focused on more homogenous products that do not raise these problems to the same degree, but that still offer relatively large classes seeking large aggregate damages.

If, however, the putative class in Merricks satisfied the requirements for a CPO, the nature of the claims and the class likely militate in favor of the case proceeding on an opt-out basis. The large number of claimants, the fact that they are consumers, the relatively small amount of per-capita damages, and the difficulties in proceeding on an opt-in basis, suggest that if this case proceeds as a collective proceeding, it will be on an opt-out basis. Future cases are likely to draw on similar types of classes – large groups of consumers who together can allege large aggregate damages, but who could not economically bring individual lawsuits.

Plaintiffs will likely continue to follow private enforcement actions on the heels of governmental investigations. Given the difficulties in quantifying overcharge and pass-through rate, as well as apportionment of damages and other CPO requirements, plaintiffs are likely to focus efforts on matters where there has already been a finding that defendants violated competition law. Additionally, plaintiffs will have more flexibility to bring claims based on conduct that arose after the Consumer Rights Act took effective, meaning that claims are likely to increase if and when EU and UK authorities disclose investigations and proceedings into conduct post-dating October 2015.


Although the CAT may not rule for some time on plaintiff's CPO application, there are clues from the panel's questions that show doubts with plaintiff's theories, but that suggest future plaintiffs may bring claims that do not suffer from the same problems. The Act poses significant liability risks for companies currently facing competition law investigations or enforcement proceedings, or that may face such actions in the future. These risks are particularly acute for companies that manufacture or sell relatively homogenous and widely available consumer products. Companies should manage all antitrust and competition law proceedings with an eye as to how future proceedings in other jurisdictions may draw on evidence adduced, or positions taken in the earlier proceedings.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions