An appeal has been filed in the record-breaking £14 billion class action suit brought against Mastercard – with a new mystery funder supporting the effort.

The case, brought by former financial services ombudsman Walter Merricks, is on behalf of 46 million consumers who are alleged to be victims of excess ‘interchange fees’ charged by card companies.

The action was initially financed by litigation funder Gerchen Keller Capital, now owned by Burford Capital, which was to provide upfront costs of up to £36m. If successful, the funder stood to make whatever was the greater of £135m or 30% of the proceeds of the case up to £1bn, plus 20% of the proceeds over £1bn. Had the claim had been granted in full, that would have added up to some £3 billion.

The Gazette understands that Gerchen is no longer funding the case and a new backer has been secured. The name of the funder and their share of any compensation award is yet to be revealed.

Burford declined to comment.

The damages claim was the largest sum claimed in English legal history. However, the case was thrown out by the Competition Appeal Tribunal earlier this year. It was one of the first cases brought under the Consumer Rights Act 2015, which provides for so-called ‘opt-out’ collective proceedings on behalf of a class of individuals.

The tribunal accepted Mastercard’s arguments that, even if loss had been suffered and could be estimated across the whole class, there was no way of ensuring that a class member would receive distribution of an amount compensating any actual loss suffered.

However, in an announcement today Merrick’s lawyers, City firm Quinn Emanuel Urquhart & Sullivan, said an appeal had been filed at the Court of Appeal as well as an application for judicial review at the administrative division of the High Court.

The firm said there was some legal uncertainty as to whether there is a direct right of appeal to the Court of Appeal or whether it needs to go to the High Court for a judicial review, so issued filings in both courts.

Merricks cited two reasons for continuing his claim.

  1. Mastercard was found guilty of setting transaction fees at an unlawful and excessive level for 16 years, leading consumers paying higher prices.
  2. The collective action regime was brought into being by parliament to help access to redress where proven wrongdoers have inflicted damage on a wide class of consumers.

‘In our case it would be totally impractical for members in the class to bring claims on an individual basis, and if our case is not allowed to proceed on a class-wide basis a vast number of individuals who suffered loss get no compensation,’ Merricks said.

He added: ‘If we do not reverse this decision, I very much doubt if we will see a consumer class claim being brought against companies that have colluded to fix prices. The whole purpose of the new class claim regime, which consumer bodies fought to see introduced, will have been defeated.’

A spokesperson for MasterCard said:  'We believe that the Competition Appeal Tribunal’s judgment to refuse certification for the proposed collective action, and in turn its refusal to hear an appeal, were the correct decisions, and that any appeal or review of this claim is without merit.  Mastercard maintains that this claim is completely unsuitable to be brought under the collective actions regime.'