Reed Smith Client Alerts

This year marks four years since significant statutory reforms regenerated the UK’s collective actions arena. Following a rocky start to this new regime, it appears that 2019 may finally bring some clarity to potential claimants navigating the first hurdle of competition class actions: the Collective Proceedings Order (‘CPO’) application. This is the first stage in the process whereby the Competition Appeals Tribunal (‘CAT’) considers whether to authorise the proposed class representative to bring the claim on behalf of the class.

Authors: Marjorie C. Holmes Charles Hewetson Kerri Bridges Emily Daniels

We previously covered the specifics of these major changes, in our client alert, which were principally brought in by the Consumer Rights Act 2015. Since then, a number of cases have been tested before the CAT, and we can now analyse the trends emerging, including the climate and appetite for litigation.

This update covers how recent key collective actions are shaping the UK’s new regime. Firstly, the CAT threw matters into contention by refusing to allow Walter Merricks to bring an action on behalf of private consumers against MasterCard. This was well reported given the number of consumers affected, and was of great significance: had the CPO been granted, it would have been the largest collective action in UK legal history. However, following a successful appeal against this decision at the Court of Appeal, the CAT must now reconsider the application. Secondly, we explore other recent ‘firsts’ – namely the first ‘opt-in’ class action, the first ‘standalone’ class action, and importantly, the first data breach class action. Thirdly, we cover the recent case law on third party funding, and how recent decisions may affect class-litigants in this evolving legal market.

An update to the Walter Merricks (MasterCard) class action

This action was intended to be a follow-on case from the interchange fees investigations on an opt-out basis (i.e. potential claimants are automatically included in the proceedings, but have the option to opt out). This comprised approximately 46 million UK residents seeking the value of £14 billion. The CAT had ruled that, even if the loss could be estimated across the whole class, attempting to calculate and distribute across the class for actual loss suffered by each individual was impractical.

On 16 April 2019, the Court of Appeal reviewed the CAT’s 2017 decision and granted Walter Merricks permission to appeal. For the purposes of the CPO application, the class representative (here, Walter Merricks) is only required to demonstrate that it is possible to assess the level of damage affecting the class, and that there is or is likely to be data available for this methodology for use at the full hearing. There is no need at this stage to produce detailed quantum evidence to calculate the loss suffered. The purpose of the application is to assess if the claims involve the same, similar, or related issues of fact or law, rather than a full assessment of the value of the claim from the available evidence.