Right of appeal lies from decision of the CAT refusing a collective proceedings order

13/11/18

On 13 November 2018, the Court of Appeal (Patten, Hamblen and Coulson LLJ) handed down an important judgment in Walter Hugh Merricks CBE v MasterCard Incorporated & Ors [2018] EWCA Civ 2527 concerning the extent to which there is a right of appeal from decisions of the Competition Appeal Tribunal (the “CAT”) refusing an application for a collective proceedings order (a “CPO”). This is the first time the point has been considered since the introduction of the collective proceedings regime.

The background to the judgment is as follows:

• Mr Merricks issued his application for a CPO in 2016. By his proposed collective proceedings, Mr Merricks sought an aggregate award of damages and interest from three companies in the Mastercard group, totalling approximately £14.098 billion.
• The application for a CPO was refused by the CAT in July 2017 (see [2017] CAT 16, available here).
• The CAT also refused permission to appeal the dismissal of the CPO application on the basis that there was no statutory provision for appeals against the Tribunal’s decision on an application for a CPO (see [2017] CAT 21, available here). This decision was consistent with the CAT’s Guide to Proceedings 2015 which suggests that, in respect of decisions relating to CPO applications, the only route of challenge is by way of judicial review (see §6.92).
• In October 2017, Mr Merricks therefore issued both an Appellant’s Notice in the Court of Appeal seeking permission to appeal and proceedings in the Administrative Court seeking permission to judicially review the Tribunal’s decision to refuse the CPO.
• At a hearing on 31 October 2018, the Court of Appeal considered this threshold jurisdictional question of whether the CAT decision would be challenged by way of appeal or through judicial review.  Mr Merricks contended that such an appeal did lie to the Court of Appeal, while Mastercard invited the Court follow the approach taken by the CAT in its permission decision and in the Guide to Proceedings.

In its 13 November 2018 judgment, the Court of Appeal held that the question of whether there is a right of appeal from a decision of the CAT in respect of a CPO application turns on the meaning of the words “as to the award of damages” in s.49(1A)(a) of the Competition Act 1998 (as amended by the Consumer Rights Act 2015).

The Court’s conclusion was that the CAT’s refusal of Mr Merricks’ application for a CPO did constitute a decision “as to the award of damages” within the meaning of s.49(1A)(a) because it was a “determination by the Tribunal that the eligibility criteria” for certification of the collective proceedings have not been met. The consequence of such a decision is that the proposed class representative is “not entitled to seek an aggregate award of damages under s.47C(2) which is a remedy unique to collective proceedings” (at §27). Since such a decision “is likely to prevent individual members of the represented class who have suffered loss from obtaining any compensation” it constitutes a decision as to the award of aggregate damages and a right of appeal lies to the Court of Appeal (also at §27). The CAT’s Guide to Proceedings 2015 is therefore wrong in this respect.

A further rolled up hearing will now be listed to consider the substantive appeal.

The Court of Appeal’s judgment is available here.