Walter Hugh Merricks CBE v Mastercard Incorporated & Ors

This was a major follow-on competition claim brought in the Competition Appeal Tribunal and then considered by the Court of Appeal on preliminary issues. The class representative, Walter Merricks, acted for around 45 million UK consumers. The claim covered purchases made between 1992 and 2008 from businesses selling in the UK that accepted Mastercard cards.

The commercial theory was indirect but important. The claim alleged that unlawful interchange fees affected the charges paid by merchants to acquiring banks, and that merchants then passed some or all of those costs into the prices charged to consumers. That is why a competition issue in the card payments system was said to have caused loss to ordinary shoppers rather than only to merchants or banks.

That point matters for business readers because many legal risks do not stay where they start. A pricing issue, a payment-system rule or a competition problem can move through a chain of contracts and transactions. By the time a claim is brought, the people said to have suffered loss may be several steps away from the original conduct.

The Court of Appeal was not deciding final liability or the amount of any damages. It was deciding three preliminary issues that would shape how the case could proceed. Even so, those issues carry practical lessons for businesses that accept card payments, sell online or operate across borders.

The Court of Appeal had to deal with three separate questions. Each one sounds technical, but each affects real commercial risk.

First was limitation and prescription. Some of the transactions in the claim were very old. The issue was whether later changes to the Competition Appeal Tribunal regime meant those older claims could still be pursued, or whether claims already barred under English law, or extinguished under Scots law, stayed that way. For businesses, this matters because limitation rules are not just procedural detail. They can decide whether historic exposure is still live.

Second was applicable law. The claim included purchases by UK consumers from foreign merchants selling into the UK, including remote sales such as internet, telephone and mail-order purchases. The question was whether those parts of the claim should be governed by the law of many different countries, or by English or Scots law. For businesses selling across borders, that issue matters because governing law can affect not only legal tests but also time limits and litigation complexity.

Third was the damages counterfactual. Mastercard wanted to argue that even if the actual fees infringed competition law, there could have been a different fee that would have qualified for exemption. If that argument worked, it could change how loss was assessed. In practical terms, this was about what the court should assume would have happened in a lawful world.

The Court of Appeal dismissed Mastercard’s appeal on the applicable law issue. It also dismissed Mastercard’s appeal on exemptibility. On limitation, it refused Mr Merricks permission to appeal, leaving the Competition Appeal Tribunal’s conclusion in place.

On limitation, the court agreed that later CAT rules did not revive claims that had already become time-barred under English law or extinguished by Scots prescription. The court treated it as highly unlikely that Parliament intended stale claims to come back to life simply because the procedural regime changed. That is an important point for businesses dealing with legacy risk: a change in forum or procedure does not automatically reopen claims that were already dead.

On exemptibility, the court held that the Commission decision was binding in a broader way than Mastercard argued. The decision was not read as saying only the exact notified fee levels failed. Instead, for the period covered, Mastercard had failed to justify the relevant positive EEA MIFs at all. The correct damages counterfactual was therefore no or zero EEA MIFs.

On applicable law, the court accepted that this collective follow-on claim, focused on aggregate loss suffered by UK consumers, could properly be treated as most closely connected with England and Wales or Scotland for the issues in dispute. The court placed weight on the fact that the restriction of competition had already been decided by the Commission and that the live issues in the proceedings were causation and aggregate loss suffered in the UK.

The first business lesson is about pass-through risk. The consumers in this case were not said to have paid the interchange fee directly. The claim was that the fee affected merchant costs and that those costs were then reflected in retail prices. That kind of argument can matter in many sectors, not just payments. If your business absorbs supplier charges, platform fees, transaction costs or distribution costs and then adjusts prices, those pricing decisions may later become part of a wider dispute.

The second lesson is about records. In a claim built on pass-through, parties often argue about who really bore a cost. Was it the supplier, the merchant, the customer, or some combination over time? A business that keeps clear records of payment costs, pricing decisions and margin changes is in a better position to explain what happened. That does not guarantee a result, but it can make a major difference if a dispute later turns on causation or quantum.

The third lesson is about scale. A legal issue that looks small on a single transaction can become very large when repeated across thousands or millions of sales. That is especially true where a claim is brought on a collective basis and each customer’s alleged loss is small. Businesses should not assume that low-value individual impact means low-value litigation risk overall.

The applicable law part of the decision is especially relevant for online sellers and cross-border traders. The claim included purchases from foreign merchants selling into the UK. Mastercard argued for a more fragmented approach. The Court of Appeal upheld the view that, in this collective follow-on claim, the issues could be treated as most closely connected with England and Wales or Scotland.

That does not mean every cross-border dispute will be handled the same way. It does show, however, that courts may look closely at where the alleged loss is suffered and how the proceedings are structured. Here, the court treated the collective nature of the claim and the aggregate loss said to be suffered by UK consumers as important features.

For a business owner, the practical takeaway is that cross-border ecommerce is not only about tax, delivery and consumer terms. It can also create difficult questions about governing law, limitation and where claims may be fought. If you sell into the UK from abroad, or if your UK business relies on overseas merchants, platforms or payment arrangements, it is sensible to map where customers are, where losses might be alleged to arise and which legal systems could become relevant in a dispute.

This is also a reminder that remote sales can complicate legal analysis even where the customer experience feels straightforward. A website checkout may look simple, but the legal picture behind it may involve several countries, several contracts and several layers of cost allocation.

The limitation part of the decision is a useful warning against assuming that procedural reform always helps claimants. The court agreed that claims already time-barred under English law, or extinguished by Scots prescription, were not revived by the later CAT regime. In plain terms, old claims did not come back to life just because the rules changed.

For businesses, that matters in two ways. First, if you are assessing historic exposure, you need to distinguish between claims that are still live and claims that are already barred or extinguished. Second, if your business is considering bringing a claim, you should not assume that a new route to court or tribunal automatically fixes an old timing problem.

The judgment also highlights the difference between English limitation and Scots prescription. The court noted that under Scots law, once the prescriptive period expires, the underlying obligation is extinguished. That is a stronger outcome than a simple procedural bar. Businesses operating across the UK should be careful not to treat English and Scottish timing rules as interchangeable.

From a risk-management perspective, the safest approach is still practical rather than theoretical: identify potential claims early, preserve documents early and get advice on timing before a dispute becomes stale. Waiting can narrow options for both claimants and defendants.

If your business accepts card payments or sells online, this case is a reminder to keep practical evidence, not just broad policies. In a later dispute, the hard questions are often about what costs were charged, who bore them, whether they were passed on and what legal framework applies to the sale.

You do not need a competition investigation to justify better records. Good documentation helps with supplier disputes, customer complaints, regulatory enquiries and insurance notifications as well as litigation.

A sensible operating approach includes reviewing payment-provider terms, understanding how transaction costs affect margins, and keeping internal records of major pricing changes. If your business trades across borders, add a legal map to your commercial map: where are customers located, which entities contract with them, and which country’s law is most likely to matter if something goes wrong?

It is also worth thinking about concentration risk. If a large share of your sales depends on one payment channel, one platform or one pricing model, a legal issue in that system can affect a large volume of transactions at once. That does not mean the system is unsafe. It means the business should understand the legal dependency as well as the commercial one.