Tribunal stays application in ’£1.5bn’ Visa and Mastercard fees case

The Competition Appeal Tribunal (CAT) declined to allow four class-action claims for repayment of card-processing fees by Visa and Mastercard to go to trial on behalf of UK travel and hospitality firms last week.

But the court granted lawyers bringing the class action, or ‘collective proceedings’, eight weeks to present revised proposals and ‘stayed’ the legal applications until then, despite opposition from Mastercard and Visa.

The ruling followed a three?day hearing in April into four separate collective claims over ‘multilateral interchange fees’ (MIFs) charged by Visa and Mastercard on corporate card and overseas visitors’ card payments.

More: Class action claims widened against Mastercard and Visa

Analysis: Card giants face £1.5bn fees claim [April 22]

Law firm Harcus Parker launched the claim in April last year alleging Visa and Mastercard forced banks to agree an “anti-competitive and unlawful” level of MIFs. It estimates the collective claim could be worth in excess of £1.5 billion to travel and hospitality businesses.

Businesses pay these fees to banks, but the charges are set by Visa and Mastercard and make up most of the merchant service charges (MSCs) which banks levy on card payments. Visa and Mastercard, in turn, receive ‘scheme fees’ from the banks.

The hearing highlighted the challenges of bringing a class action claim in the UK. Mastercard and Visa opposed the claims on several grounds, not least that thousands of merchants have already sued them over these fees, with more than 2,300 UK claimants currently suing Visa.

The court noted that failed collective proceedings could hinder the rights of individual businesses to take legal action. In a statement, Harcus Parker said: “The CAT has accepted proceedings are necessary to enable access to justice for the many merchants who would otherwise struggle to obtain redress, and rejected Mastercard and Visa’s arguments that collective proceedings were not necessary.

“The CAT has invited us to revise our proposals.”

However, a Mastercard spokesperson described the claim as “fundamentally flawed”, saying: “We’re encouraged by the court’s decision and believe that if a revised claim is made, it should equally fail.”

More: Class action claims widened against Mastercard and Visa

Analysis: Card giants face £1.5bn fees claim [April 22]