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Mastercard v Merricks – Supreme Court gives landmark judgment dismissing Mastercard’s appeal

On 11 December 2020, judgment was handed down in Mastercard v Merricks in the Supreme Court, dismissing Mastercard’s appeal against the Court of Appeal judgment which allowed Walter Merricks’ appeal against the CAT’s judgment refusing to grant a Collective Proceedings Order (CPO). Mr Merricks, former Chief Ombudsman of the Financial Ombudsman Service, is seeking to represent a class of around 46m adults in the UK, in a claim estimated to be worth c.£14bn, which seeks to reclaim funds for Mastercard users who were overcharged on transaction fees between 1992 and 2008.

The Supreme Court appeal in May 2020 was heard by Lord Briggs, Lord Kerr, Lord Leggatt, Lord Sales and Lord Thomas. Following the hearing, and before judgment was given, Lord Kerr sadly died. The Court was then reconstituted as Lord Briggs, Lord Leggatt, Lord Sales and Lord Thomas.

The two grounds of appeal brought by Mastercard were:

1. That the CAT had been entitled to find that Mr Merricks had not shown that there would be sufficient data for his proposed methodology for calculating damages on an aggregate basis across the class to be workable; and

2. That the CAT was entitled to have regard to the fact that the distribution of any aggregate damages award would not bear any relation to the compensatory principle.

Mastercard sought to have the CAT’s dismissal of the CPO application affirmed.

Lord Briggs, with Lord Thomas agreeing, rejected Mastercard’s first ground of appeal, finding that the CAT had erred in its approach to assessing Mr Merricks’ proposed methodology for calculating damages on an aggregate basis across the class. Mastercard’s second ground of appeal was also dismissed, with Lord Briggs finding that the CAT had erred as it directed itself that an aggregate damages award had to be distributed on a compensatory basis.

On the second ground of appeal, Lord Leggatt and Lord Sales agreed with Lord Briggs in broad terms, finding that the CAT had misdirected itself by finding that an aggregate damages award would have to be distributed on a compensatory basis.

On the first ground of appeal, although Lord Leggatt and Lord Sales agreed with Mastercard, they stated that Lord Kerr had expressed agreement with Lord Briggs’ judgment prior to his death, and would have been recorded as agreeing with it. On the basis that they were originally in a minority, and that if the Court was left evenly divided, re-argument would have been necessary before a different constitution which they considered wasteful of resources and not a just outcome, Lord Leggatt and Lord Sales agreed to dismiss Mastercard’s appeal.

Mr Merrick’s CPO application has been remitted to the CAT for reconsideration.

Matthew Cook of One Essex Court, along with Mark Hoskins QC, Hugo Leith and Jon Lawrence of Brick Court Chambers, acted for Mastercard, instructed by Freshfields Bruckhaus Deringer LLP.

You can find the full judgment here.