LONDON (Reuters) – Mastercard Inc on Thursday rebuffed attempts to add compound interest to a 14 billion pound ($19.2 billion) British consumer class action lawsuit at a hearing in a specialist court to certify and agree on the scope of the historical case.
On the first day of a two-day hearing before the Competition Appeal Tribunal (CAT), a lawyer for Mastercard said the common law did not assume that interest would accrue on a compounded basis on such claims.
“Law is not the same as economic theory,” he said.
“In most cases, simple interest will be perfectly sufficient as a means of compensation.”
Former financial ombudsman Walter Merricks, who is leading the complaint, alleges Mastercard overcharged almost 60million people in Britain – including around 14million who are now deceased – over almost 16 years. The case could entitle the adults and their property to around 300 pounds each if successful.
Mastercard will set out its arguments on Friday on why the deceased’s claims should be excluded, after which the CAT must decide whether or not to certify Britain’s first mass consumer claim as a class action – and clarify the rules for a series of other class action lawsuits stuck in its wake.
The UK Supreme Court cleared the way for the case to proceed after overriding objections in December.
Merricks, who is being advised by law firm Quinn Emanuel, alleges Mastercard charged excessive ‘interchange’ fees – the fees retailers pay credit card companies when consumers use a card to make purchases – between May 1992 and June 2008 and that these charges were passed on to consumers as retailers raised prices.
Mastercard says it ‘fundamentally disagrees’ with the claim that people have received valuable benefits from its payment technology and that the lawsuit is being led by US lawyers and backed by organizations focused on winning money for themselves.
The case was filed in 2016, a year after the CAT was appointed to oversee Britain’s US-style ‘opt-out’ class action regime for breaches of UK or EU competition law – and 12 years after that the European Commission ruled that Mastercard had illegally charged cross-border interchange fees over the period.
($1 = 0.7288 pounds)
Reporting by Kirstin Ridley in London; Editing by Emelia Sithole-Matarise and Matthew Lewis