Walter Merricks decided to take on the biggest class action in British history, believing millions of consumers had paid higher prices in shops for 16 years because of allegedly excessive transaction fees. “I thought, ‘Right. You’re on’,” the former financial ombudsman said.
Last week Merricks’s ambition was vindicated when the court of appeal ruled in his favor, meaning the Competition Appeal Tribunal, which had previously thrown out his claim, will have to reconsider it. The £14 billion (US$18.2 billion) claim is enormous – and could net about £300 (US$389.80) each for 46.2 million adults in the UK.
In 2007, the European Commission ruled that Visa and Mastercard had breached competition law by inflating charges on card transactions. Visa accepted the decision and, in one case in 2016, settled a £1.2 billion claim made by Tesco out of court.
But between 1992 and 2008, it is alleged that Mastercard imposed unlawful fees on transactions, which were then passed on to consumers via higher retail prices. Merricks calculated the total value of commerce in the UK in those 16 years and then worked out the difference, plus interest, had Mastercard been operating its scheme as instructed by the European commission.
As for what happens next with Mastercard, he is simply waiting. It is expected the company, which has a stock market valuation of US$246.9 billion, might offer a settlement rather than drag the case out for another four or five years. Merricks’s action was originally funded by American litigation funder Gerchen Keller Capital, which provided £36 million (US$46.8 million) of upfront costs with a view to recouping 30% of the proceeds of the case, estimated at around £1 billion (US$1.3 billion).
“I’m in it for a fair outcome,” says Merricks. “If Mastercard do come up with a sensible settlement, I will certainly consider it. I want consumers to be properly compensated. I don’t want this case to go on longer than it needs to.”
Full Content: The Guardian
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