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22nd September 2016

And one for all…

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The first proposed class actions in competition law in the UK, permitted since October 2015 through the Consumers Rights Act 2015, have been commenced.

Class actions in competition law are a relatively new feature of the UK’s legal landscape. Their purpose is to pursue under the umbrella of one set of proceedings against a common defendant a large number of claims (perhaps of relatively small value) which raise similar issues of fact or law. One advantage of class actions is that they provide a forum for claims to be brought (eg on behalf of consumers) which it would be uneconomic to bring as separate proceedings.

Under changes introduced through the Consumer Credit Act 2015, the Competition Appeals Tribunal has power to hear class actions in what are known as “collective proceedings". Where conditions are satisfied, the CAT may combine a number of claims and appoint a representative for all claimants in the proceedings. There are two types of collective proceedings: “Opt-in collective proceedings” – claims brought on behalf of members of the class of persons to which the proceedings relate who opt into the claim by notifying the representative; and “Opt-out collective proceedings” – claims brought on behalf of members of the class of persons to which the proceedings relate who have not opted out (or, if they are not domiciled in the UK, who have opted in).

This year has seen the first class actions initiated before the CAT. The first proposed class action in the UK was filed by Dorothy Gibson, the General Secretary of the National Pensioners Convention, who proposes to be appointed as the representative in “opt-in” proceedings against Pride Mobility Products Limited. The claims follow on from a finding of the Office of Fair Trading (as was) in 2014 that Pride had infringed competition law by entering into agreements and concerted practices aimed at prohibiting the online advertising of prices for certain models of Pride mobility scooters below Pride’s recommended retail prices. The proposed class as set out in the claim form is any person who purchased a new Pride mobility scooter in the UK between 1 February 2010 and 29 February 2012 (but the definition of the class may be refined).

The hearing of Ms Gibson’s application to be appointed as a representative of the class is due to take place in December 2016. Mastercard is facing a class action by consumers for damages said to be for up to £19 billion in respect of an infringement of competition law from 1992 to 2007 for which the European Court of Justice found the organisation liable by fixing a minimum price which banks were required to charge merchants for accepting payments made by credit and debit cards.

In September 2016, Walter Merricks CBE applied to the CAT for permission to be appointed as representative of individuals who between 22 May 1992 and 21 June 2008 purchased goods and/or services from businesses selling in the UK that accepted MasterCard cards, at a time at which those individuals were both: (1) resident in the UK for a continuous period of at least three months, and (2) aged 16 years or over. Mr Merricks, a former Chief Ombudsman of the Financial Ombudsman Service, proposes that the proceedings against Mastercard take the form of an “opt-out” action in respect of a class which is estimated to number 46.2 million individuals.

As the first class actions in competition law, the progress of these cases will be followed closely and their outcome will give an indication of the efficacy of such proceedings for achieving a remedy for those who have incurred a financial loss as a result of infringement of the competition rules.

For more information please visit our Litigation services page or contact Stephen Cole on 01604 233233 or click here to email Stephen.