Quinn Emanuel Urquhart & Sullivan has been instructed to bring the history-making case against MasterCard, which is to be the first collective damages claim of its kind filed in the UK. The claim will pursue around £19bn in collective damages from MasterCard over the ‘unlawfully high’ interchange fees charged to retailers for shoppers using MasterCard credit or debit cards in their stores over a 16-year period between 1992 and 2008. The claim posits that retailers passed these fees on to consumers in the form of inflated prices for goods and services, estimating several hundred pounds’ worth of damages per British consumer. Chicago-based litigation funder Gerchen Keller Capital has handed Quinn Emanuel a $40m war chest to pursue the landmark claim against MasterCard, and will claim a slice of any damages awarded if the lawsuit is successful.

A warning to others

The fees in question were found to be illegal by the European Commission in 2014, so the present claim will focus only on the damages inflicted on consumers. ‘To be clear, there is no question that MasterCard acted illegally in the way it conducted its business, a business that affects all of us. All of us overpaid to the tune of £19bn during a period lasting 16 years,’ said former chief financial services ombudsman Walter Merricks, who is acting as the consumer representative in the case. ‘This case should signal to companies that break anti-competition laws at the expense of UK consumers that they do so at their financial peril,’ he added.

Aggregating claims

According to Quinn’s lead partner for the action, Boris Bronfentrinker, the claim is ‘precisely’ the kind for which the new collective action regime was established, wherein claims by individual consumers would have been too small to be worth pursuing. ‘By aggregating the claims and bringing them on a collective basis, all UK consumers will get the compensation they are owed,’ he said. MasterCard has said that it ‘firmly’ disagrees with the legal basis of the claim and has instructed Jones Day to defend the company.

Sources: Legal Business; The Guardian