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A false start: Merricks v MasterCard

Stephen Wisking et al., Litigation Funding, October 2017

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This article considers a recent decision in which the Competition Appeal Tribunal (CAT) refused certification for a proposed £14bn opt-out collective action against Mastercard. The ruling contains important clarification on the role of funding in such cases. A new UK competition law collective redress regime was introduced in October 2015. It had been widely expected that extensive use would be made of the new procedure, which allows representatives to bring actions on behalf of consumers and/or businesses, subject to certification from the CAT. However, to date only two applications for a Collective Proceedings Order (CPO) have been made. This slow start is thought to be due partly to limitation period complexities, partly to an absence of competition infringement decisions with favourable fact patterns, and partly to uncertainties about the viability of third-party funding in opt-out claims (where there can be no contractual relationship with the class members). The first application, in Dorothy Gibson v Pride Mobility Products Limited, was withdrawn prior to a final CPO decision, after the CAT raised objections to the applicant’s case on causation and quantum ([2017] CAT 9). The CAT’s decision on certification in the second case – Walter Merricks CBE v MasterCard Inc – was therefore hotly anticipated, not least due to the challenges raised by Mastercard to the applicant’s funding arrangements.

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