Quinn Emanuel Urquhart & Sullivan is poised to launch a £19bn class action against MasterCard over anti-competitive credit card fees.
The claim could become only the second of its kind ever to be brought under the Consumer Rights Act 2015.
The case would be also be the highest value consumer claim in UK legal history should Quinn Emanuel pursue the colossal £19bn figure when the claim is filed.
Lawyers will go before the Competition Appeal Tribunal (CAT) this autumn to seek permission to bring the claim on a collective, “opt-out” basis.
The new class action rules allow lawyers to bring claims on behalf of a group of consumers, where everyone affected is automatically a member of the class unless they opt-out.
The legal market expected a flurry of collective actions following the new legislation but so far just one has been filed by Leigh Day, on behalf of people who were overcharged for mobility scooters from manufacturer Pride.
The value of the Leigh Day claim is currently estimated to be around £7.7m following a finding by the Office of Fair Trading.
Similarly, MasterCard was found by the European Commission to have infringed EU law by imposing charges known as interchange fees on the use of its credit and debit cards. It then lost a decade-long legal battle in the European Court of Justice in 2014, with judges ruling MasterCard abused its dominant market position by charging the anti-competitive rates.
The regulatory decision means liability in the MasterCard case has already been established, so Quinn Emanuel’s claim is a follow-on damages claim, during which the court will assess causation and quantum.
MasterCard has instructed Jones Day partner Nicholas Cotter on the claim. Cotter is also representing MasterCard on a raft of commercial litigation claims over interchange fees brought by numerous high street retailers, which are progressing through the High Court.
In a statement, Quinn Emanuel said it had reached the £19bn damages figure “based on expert analysis using publicly available data”, adding: “This will equate to hundreds of pounds in damages for every single consumer.”
Quinn Emanuel’s client and the class representative in this claim is former Chief Financial Services ombudsman Walter Merricks, who has a history of overseeing mis-selling cases against financial institutions.
Launching the claim on Tuesday (5 July) Merricks said: “All of us over-paid to the tune of up to £19bn during a period lasting 16 years. My aim is to get the redress to which UK consumers are entitled and to ensure that MasterCard cannot hold on to the illegal profits it made.
“This case should send a signal to companies that break competition laws at the expense of UK consumers that they do so at their financial peril.”
Quinn Emanuel partners Boris Bronfentrinker and Kate Vernon are leading the claim. Bronfentrinker joined from Hausfeld in late 2014 while former DLA Piper competition head Vernon moved over this March. The pair have instructed Monckton Chambers’s Paul Harris QC and Brick Court Chambers’ Marie Demetriou QC.
The claim is being funded by third-party litigation funder Gerchen Keller Capital, which is putting up a pot of £40m for the case.