Competition Appeal Tribunal Certifies Mastercard Class Action

Significant Developments in UK Competition Law

The U.K. Competition Appeal Tribunal (CAT) last week certified the well-publicized Mastercard^[1] class action litigation. In our December 2020 perspective “All for One and One for All: UK Supreme Court Guidance on Collective Proceedings in Competition Appeal Tribunal” we covered the important judgment of the Supreme Court^[2] in Mastercard. At issue was the correct approach to certifying “collective proceedings” (i.e. class actions) for follow-on damages claims in the CAT. Although the Mastercard case was denied certification in the CAT back in 2017, it was remitted to the CAT for reconsideration following the successful appeal in the Supreme Court.

By way of recap, the Supreme Court gave guidance on the correct test to apply at the certification stage of collective proceedings, confirming that the threshold for certification was lower than the CAT had decided it should be and noting the following three key considerations in particular:

Certification does not involve a merits test, as required under a strike-out or summary judgment application.

The CAT is expected to conduct a “value judgment” about whether the claims are suitable to be brought in collective proceedings, taking into account the non-exhaustive list of factors in the U.K. Competition Act. The listed factors are not separate suitability hurdles for the claimant to overcome.

The requirement that there be commonality of issues in the claim is relevant both at the first stage of the certification test, as a preliminary hurdle, and at the second stage, where the extent to which collective proceedings would be an appropriate means for the fair and efficient resolution of such common issues will be an important factor under the Competition Act suitability test.

When the case was remitted to the CAT, Mastercard did not oppose certification. There remained, however, two technical issues between the parties, which the CAT decided in favor of Mastercard:

Deceased individuals could not be part of the class, only their personal representatives could be. As it was too late to add the representatives as claimants, deceased persons’ interests were excluded from the claim.

Claimants could only claim simple, rather than compound, interest in respect of the claim.

As the CAT’s confirmation of certification of the class action reflects the Supreme Court’s “lowering of the bar” in December 2020, it is not unexpected. Nonetheless, the CAT’s decision marks the first certification in the CAT of collective opt out proceedings and is a significant development in U.K. litigation. Because of the uncertainty as to the correct approach to certification prior to the Supreme Court’s decision late last year, this decision may add to the anticipated momentum behind competition class actions following the Supreme Court’s decision and heighten the expectation that more substantial competition class actions (both those that were on hold pending the Supreme Court’s judgment and others not yet commenced, and across a range of industries) will now proceed or be commenced in the U.K.