UNITED KINGDOM – A significant development in UK class actions landed today – with the English Court of Appeal issuing a judgment that requires the UK Competition Appeal Tribunal (“CAT“) to reconsider certification of an opt out class action issued against Mastercard on behalf of approx 46.2m people and valued at £14.098bn. The judgment is published in full here and provides strong guidance to the CAT, indicating that a collective proceedings order will now be made in this case and also increases the likelihood an award of damages being made in light of the Court of Appeal’s analysis of the expert economic evidence.
The claim seeks to certify a class covering all individuals over the age of 16 who had been resident in the UK for a continuous period of at least 3 months and who between 22 May 1992 and 21 June 2008 purchased goods or services from businesses in the UK which accepted Mastercard. It includes all purchasers irrespective of whether they used a Mastercard payment card to make their purchase.
The CAT had rejected the application to certify on the basis that the economic evidence submitted by the claimant didn’t calculate compensation by reference to each individual affected. This led it to conclude that there would be an issue in determining whether everyone in the class would be able to show that they had in fact been harmed, going both to causation and ability to distribute the pot.
The Court of Appeal disagreed with this analysis. It accepted the claimant representative’s argument that there is no requirement in UK procedure to assess an aggregate award from the “bottom up” by calculating losses suffered by each affected individual (and referred approvingly on this point to the Canadian Supreme Court decision in Pro-Sys Consultants Ltd v Microsoft Corp.  SCC 57). The defendant had argued that “an award of aggregate damages would be inimical to the compensatory nature of damages and impossible to assess on any reliable basis”. It also suggested that proposed method of distribution (which was that any award of damages should be distributed to all class members on an equal, per capita basis in respect of each year of the claim period in which they were members of the class) would fail to reflect the compensatory nature of damages and result in individuals receiving amounts which bore no reasonable relationship to their actual loss. The Court of Appeal rejected both points and said that the CAT had demanded too much of the proposed representative at the certification stage, concluding “At the certification stage the proposed representative should not, in our view, be required to demonstrate more than that he has a real prospect of success.”
This judgment likely will be spur to class action filings in the UK. Only five applications for certification have been filed at time of writing since the introduction of opt out class recovery in October 2015, and none yet approved. However, this confirmation that UK courts will be generous in their approach to certification and be guided by the approach taken in Canada (which both the CAT and Court of Appeal relied upon) will give claimant representatives and firms greater confidence in a favourable outcome. It also underscores the need for a global class actions litigation strategy as class actions activity ramps up in the EU (and notably in the UK, Netherlands, Italy) and not only in competition cases but also in respect of consumer and data privacy breaches.