The UK's Supreme Court has cleared the way for a £14 billion class action lawsuit brought against Mastercard over interchange fee charges.
The judgement by the UK's top court marks the near-culmination of a four-year legal battle to have the case heard.
In 2016, former financial ombudsman Walter Merricks launched the legal challenge on behalf of 46 million customers and based on the European Commission’s 2007 finding that the issuer charged inflated card fees on consumer card transactions between 1992 and 2008.
The claim was brought as an opt-out collective or class action, made possible by the Consumer Rights Act 2015.
The judgment, upholding a Court of Appeal decision last year, could set the scene for Britain’s first mass consumer claim brought under the new legal regime. If the suit succeeds, almost every adult present in the UK between 1992 and 2008 could receive a payout of up to £300 from Mastercard.
The case now goes back to the antitrust tribunal to re-hear arguments about certifying the claim and constituting the class. A previous dismissal of the suit by the Competition Appeals Tribunal was judged by the Supreme Court to include five errors of law.
“It is nearly 12 years since Mastercard was clearly told that they had broken the law by imposing excessive card transaction charges, damaging consumers over a prolonged period," says Merrick. “When challenged, all they have done is to raise technical legal arguments that turn out to have no merit - as the court of appeal has shown today. It’s now time for Mastercard to admit the damage they did, to apologise to the British public, and to agree to pay the compensation they owe."
In robust response, Mastercard says: “We fundamentally disagree with this claim and know people have received valuable benefits from Mastercard’s payments technology. No UK consumers have asked for this claim. It is being driven by ‘hit and hope’ U.S lawyers, backed by organisations primarily focused on making money for themselves. Mastercard will be asking the Competition Appeal Tribunal to avert the serious risk of the new collective action regime going down the wrong path with a case which is fundamentally flawed.”