Consumer Rights Argued at Highest Level
On 13-14 May 2020 at the Supreme Court, former Chief Financial Ombudsman, Walter Merricks CBE, took a class action on behalf of consumers against Mastercard to the highest court in the land. The action was taken with support from a small group of consumer experts, amongst them Arnold Pindar NCF Chair.
The claim is that unlawful card fees were passed on to shoppers through higher prices from 1992 to 2008. The case was thrown out by the Class Action Tribunal in 2017 but was successful at the Court of Appeal. Due to this being an important test case for the working of the relatively new Consumer Rights Act, the Supreme Court will determine whether the claim can proceed.
Walter Merricks claims £14bn on behalf of United Kingdom consumers. If successful, an estimated 46.2 million consumers could each receive a handout of about £300.
The new Act makes it easier for consumers to seek compensation by giving them six years to bring a case and by enabling anyone forming part of the suing ‘class’ to be a part of the case.
The class action follows on from a case in the European Court in which Mastercard was found guilty of restricting card payment competition which harmed consumers and retailers. Mastercard was fined €570m by the court.
‘Errors in Law’
On behalf of the claimants, Paul Harris QC expertly claimed that the Tribunal had made errors in law in dismissing the original claim. One difficulty for the claim is that we cannot say exactly how much each individual claimant (of the 46.2 million!) is owed. It is not just those with a Mastercard account that we claim are owed compensation but everyone that bought from a store or service that accepted Mastercard payments. As Mastercard have argued, the overcharge was passed on, or spread across, by e.g. supermarkets, to all their customers, not just those using their credit cards.
In a class action arguing overcharging for purchasing e.g. mobility vehicles (part of a previous case), it is possible to determine the exact loss for each individual claimant from receipts. In this case, it is argued by Walter Merricks that a pragmatic decision will be needed to share any compensation fairly amongst the many claimants.
Virtual Justice and a Verdict
The Supreme Court hearing was carried out on line by video conferencing due to the pandemic, which was rather strange to observe as you could only see the speaker and not the reactions to the submissions by others in the court. Having heard the submissions for and against the case, the Court is expected to give their ruling in the coming weeks.