The Competition Appeal Tribunal is set to hear arguments today on a complex EU law issue worth billions of pounds in proceedings against credit card providers, Mastercard and Visa.

The hearing is the latest round in the Merchant Interchange Umbrella Proceedings, brought by corporate claimants such as Marks & Spencer, Whitbread, Vodafone, Primark and Ocado, who argue that such fees (MIFs) set by Mastercard and Visa are unlawful.

The claimants say that both defendants made illegal overcharges on both domestic and cross border MIFs in one of the largest cases ever brought before the CAT, alongside parallel Mastercard proceedings brought on behalf of consumers.

Mastercard and Visa cards

Source: iStock

The three-day hearing, heard before Mr Justice Marcus Smith, Mr Justice Roth, and Ben Tidswell, will determine the post-Brexit implications for UK and EU claimants of a European Court of Justice case, Volvo and DAF Trucks, Case C-267/20 - the Volvo judgment – on both the Umbrella Proceedings, and concurrent litigation being brought by Walter Merricks CBE.

At stake is a preliminary issues decision on the meaning of Volvo’s EU law precedent on limitation and whether the tribunal should follow CJEU jurisprudence, which holds that the time to bring proceedings does not start to run until the infringement in question stops. As both Visa and Mastercard continue to charge MIFs on all card transactions, as they have for decades, the consequences will determine the size of damages at stake.

The tribunal will decide the effect of the Volvo judgment itself as a pure point of law, ruling at what point the claims should run – either from six years before the date of issue (under English limitation rules) or to the beginning of the infringing behaviour (potentially as far back as 1992).

A decision applying the Volvo precedent would give the Merricks claim a complete answer to Mastercard’s limitation defence, avoiding arguments over limitation having been suspended due to concealment of the infringement, in a later trial in Jan 2024. The difference is worth billions.

Any decision by the CAT is likely to be appealed to the Court of Appeal and beyond.

The hearing will also decide on some claims with non-English EU domestic law issues to be determined, involving the EU (Withdrawal) Act and accrued EU law rights of both EU and non-EU citizens and their treatment by the English courts.

Stephenson Harwood represents the Umbrella Claimants, supported by Humphries Kerstetter and Scott and Scott, Willkie Farr & Gallagher represent Merricks. Jones Day and Freshfields represent Mastercard. Linklaters and Milbank represent Visa.