The UK Competition Appeal Tribunal (CAT or “Tribunal“) has certified the first opt-out collective action since the UK class actions regime was introduced in 2015. The application had been dismissed on first consideration but after a series of appeals that went all the way to the Supreme Court, Walter Merricks CBE has been granted a Collective Proceedings Order (CPO) in his GBP 14 billion claim on interchange fees. The size and complexity of the claims will be a real test to the efficacy of the UK’s collective action regime.

Mr. Merricks filed his claim in 2017 on behalf of 46.2 million people. The CAT initially refused to certify the action, largely on the basis that it was not suitable for an aggregate award of damages. However, the Court of Appeal disagreed and another appeal followed.

In December 2020, the Supreme Court handed down a 3:2 judgment, setting out its view on the criteria for certification of collective actions. This was widely viewed as setting a low bar for opt-out claims, as illustrated by the flurry of CPO applications that have been filed since.

In light of the Supreme Court’s judgment, the CPO was not opposed. Nonetheless, the CAT made it clear that it had to be satisfied on its own account that certification was appropriate. There also remained a few points in contention for the CAT to grapple with, and which will have a bearing on how future claims are pleaded:

Costs undertaking: Mr Merricks’ authorisation as class representative is subject to his litigation funder giving a suitable costs undertaking to pay any adverse costs order (on the basis that the proposed defendant would otherwise have no direct third-party right to enforce that obligation to pay). The CAT also pressed Mr. Merricks to secure an amendment to his litigation funding agreement so that it cannot be terminated by the funder without it having taken independent legal advice. The CAT was concerned not to afford the funder too broad a discretion to terminate funding since that decision could create difficulty for Mr. Merricks as class representative and, absent alternative funding being secured, the collapse of the litigation. Other CPO applicants and funders can expect similar scrutiny of their funding arrangements by the CAT.

Deceased persons: The CAT refused to grant Mr. Merricks permission to amend the CPO application to include deceased persons. There was some debate as to whether or not deceased persons were included in the original CPO application, with  Mr. Merricks ultimately applying to revise the class definition during the course of the CPO hearing. In refusing to grant permission, the CAT reasoned that:

  • Claims brought in name of dead persons are a nullity – they can only be brought by a representative of their estate, which is not what Mr. Merricks sought.
  • Dead persons cannot be “domiciled” in the UK for purposes of the collective action regime.
  • The limitation period had expired for such new claims in any event.

The CAT has not closed the door to deceased persons being included within a class, but the class formulation would need to be for “representatives of their estate” and the application must be within the limitation period.

Compound interest: The CAT excluded claims for compound interest from the collective action, wiping several billion pounds off the value of the claims. Such claims were not deemed suitable for inclusion as there was no credible or plausible method for estimating any loss by compound interest on an aggregate basis. In reaching this conclusion, the CAT made numerous references to the majority’s reasoning in the Supreme Court on the need to do its best with the data that is available and for the suitability of a claim for aggregate damages to be interpreted in a relative sense. Contrary to the main claim for overcharge, the claim for compound interest did not meet even this low bar.

While the CAT’s approval of the CPO was largely expected, its approach to compound interest in particular shows that the CAT will not be willing to simply wave collective claims through. Nonetheless, the pending CPO applicants will likely take comfort from the CAT’s more restrained approach to scrutiny of claims (consistent with the Supreme Court’s guidance in Merricks). This can be seen as a promising sign for those pursuing claims within the UK’s collective action regime, but there remains a long road ahead for Mr. Merricks.


Francesca Richmond is a partner in the Baker McKenzie Dispute Resolution team based in London. Francesca specializes in the litigation and investigation of high value commercial and regulatory enforcement matters with a focus on class actions and mass torts litigation. Her practice spans ethics, governance and human rights in addition to litigation of antitrust, consumer and data privacy law.


Jennifer is a Senior Associate in the Baker McKenzie Dispute Resolution team based in London. She is also a member of the firm's EU, Competition & Trade team. Jennifer advises clients in relation to general commercial disputes, competition claims, competition appeals and judicial review challenges. She is a member of the firm's Competition Litigation, Public Law and Business Crime Units.