Facts:

The issue arose in a long-running dispute brought against Visa and Mastercard from alleged infringement of competition rules due to multilateral interchange fees. 

Commercial and Interregional Card Claims I Limited and Commercial and Interregional Card Claims II Limited (CICC I and CICC II) are the proposed class representatives. They are special-purpose vehicles (SPVs) established on behalf of defined classes of merchants to pursue collective proceedings against Visa and Mastercard. CICC I filed separate claim forms in relation to inter-regional and commercial card interchange fees on an opt-in basis for merchants with annual turnover exceeding £100 million. CICC II applied to bring opt-out proceedings concerning the same fees, though this was targeted at merchants with annual turnover below £100 million.

On the 8th of June 2023, CAT declined to make collective proceedings orders due to problems with each application. Instead, CAT granted CICC I and II eight weeks to revise their claim forms which they accepted and indicated they would no longer pursue claims in relation to inter-regional interchange fees. Visa and Mastercard sought permission to appeal the rejection by CAT for permission to appeal the 8th of June judgement.  

Decision:

The Court of Appeal dismissed the appeal challenging CAT’s ruling allowing class representatives a second chance to get collective proceedings applications actions approved. The Court held that CAT acted within its discretion and there was no error of law, meaning that the threshold of section 49(1A) CA 1998, as clarified in Evans v Barclays PLC and Others [2023], was not met.

The Court “recognised further that the case management decisions of the CAT were exercises in pragmatism and that undue formalism and precision were not required.”

Regarding the existence of Umbrella Proceedings, CAT acted within its legitimate discretion in accordance with Practice Direction 2/2022. It was right to hold that those proceedings did not confer any material benefit over either opt-in or opt-out proceedings. 

The Court of Appeal reiterated its reluctance to intervene when the CAT enjoys broad discretion, including decisions as to the sort of procedure that the CAT judges to be the easiest or most efficient to manage. Based on the test it is for CAT to form its view of the relevant factors to suitability. CAT was, therefore, entitled to conclude that individual proceedings were not more suitable than collective proceedings.  

Therefore, the Court of Appeal concluded that the CAT has been right to refuse the applications for permission to appeal.

Implications:

This judgement reiterates the unwillingness of the Court of Appeal to interfere when CAT has acted within its discretion and, even if the Court might have drawn a different conclusion, it is not sufficient for it to interfere. 

This litigation demonstrates the increasing importance of collective actions but also that, even if CAT is not convinced by the proposals, it could ask for them to be reviewed. Such a possibility or second chance highlights a trend toward collective redress. The refusal of the Court of Appeal to intervene also shows that companies do not have many remedies if CAT is acting within the limit of its discretion. 

It will be very interesting to see whether the decision of CAT regarding the commercial card fees.