Determination of Domicile Date in Collective Proceedings under Competition Act 1998: Insights from Mastercard v Merricks

Introduction

The case of Mastercard Incorporated & Ors v Merricks ([2022] EWCA Civ 1568) marks a pivotal moment in the interpretation and application of collective proceedings under the Competition Act 1998, as amended by the Consumer Rights Act 2015. This landmark case addresses the crucial issue of determining the "domicile date" in collective proceedings, a factor that significantly influences class membership and the scope of liability. The appellants, collectively referred to as "Mastercard," challenged the decision of the Competition Appeal Tribunal (CAT) which set the domicile date to the date of the Claim Form issuance, thereby impacting the inclusion of claimants who may have since moved or deceased.

Summary of the Judgment

The Court of Appeal unanimously dismissed Mastercard's appeal against the CAT's decision to set the domicile date as September 6, 2016—the date when the Claim Form was issued. This decision was pivotal in determining the class composition for the collective proceedings concerning Mastercard's alleged breach of statutory duty under Article 101 TFEU. The CAT's decision ensures that individuals who were domiciled in the UK at the time the Claim Form was issued are automatically included in the class unless they opt out, while those domiciled abroad at that date must opt in to be part of the proceedings.

Mastercard contended that setting the domicile date to the CPO date (August 18, 2021) would prevent the exclusion of approximately three million individuals who had died after the Claim Form was issued but before the CPO was granted. However, the Court upheld the CAT's discretion, emphasizing that the domicile date determination aligned with the overarching purpose of collective proceedings to facilitate access to justice for claimants who might otherwise be unable to pursue individual claims.

Analysis

Precedents Cited

The judgment extensively referenced prior decisions to elucidate the principles governing statutory discretion and the purpose of the domicile date:

BT Group Plc v Le Patourel [2022] EWCA Civ 593: Highlighted the importance of adhering to the "General Principles" set forth in Rule 4 of the CAT Rules, ensuring cases are dealt with justly and fairly.
R (World Development Movement Ltd) v Secretary of State for Foreign and Commonwealth Affairs [1995] 1 WLR 386: Established that statutory powers must be exercised in alignment with their true purposes, rejecting any application for ulterior motives.
Ittihadieh v 5-11 Cheyne Gardens RTM Co Ltd [2017] EWCA Civ 121: Emphasized that discretion must be exercised in furtherance of the statutory purpose, not for unrelated objectives.
Stewart v Perth and Kinross Council [2004] UKHL 16: Affirmed that discretionary powers cannot be used for purposes outside their statutory grant.
HLB Kidsons v Lloyd's Underwriters [2008] EWCA Civ 1206: Demonstrated the judiciary's deference to parties' concessions in legal constructions.

These precedents collectively reinforce that discretion granted by legislation is not unfettered and must align with the statutory intent.

Legal Reasoning

The Court's legal reasoning centered on the scope of the CAT's discretion in determining the domicile date. It underscored that:

Statutory Purpose: The domicile date's primary function is to establish a connection between class members and the UK jurisdiction, ensuring that defendants are not subjected to international claims unless there is a clear nexus.
Discretion Consideration: The CAT is empowered to set the domicile date based on factors such as the statutory regime's structure, the rationale behind the domicile date, case-specific contexts, and overarching interests of justice.
Impact on Claimants: Setting the domicile date to the Claim Form issuance date promotes access to justice for claimants who had valid claims at that time, preventing a potential windfall for defendants by excluding millions of valid claims due to procedural delays.
Overall Purpose of Collective Proceedings: Aligning with the regime's objective to facilitate judicial efficiency and access to justice, the CAT's decision supports the aggregation of claims without undermining the legal rights of the class members.

The court rejected Mastercard's argument that the domicile date should be anchored to the CPO date, emphasizing that such an interpretation would contravene the collective proceedings regime's fundamental objectives.

Impact

The ruling has profound implications for future collective proceedings under the Competition Act 1998:

Class Definition Independence: The domicile date can be determined independently of the CPO date, allowing for flexibility based on the specifics of each case.
Access to Justice: Ensures that claimants with valid claims at the initiation of proceedings are not unjustly excluded due to procedural timelines.
Judicial Discretion: Reinforces the broad discretion of tribunals like the CAT, provided their decisions align with the statutory purpose and overarching principles of justice.
Claim Form Drafting: Highlights the importance of precise class definitions in Claim Forms to avoid unintended exclusions or inclusions.

Legal practitioners must now carefully consider the timing and parameters when drafting Claim Forms for collective actions to ensure that the domicile date serves its intended purpose without compromising the class's integrity.

Complex Concepts Simplified

Domicile Date

The "domicile date" is a critical date set during collective legal proceedings that determines the criteria for class membership based on an individual's residency status at that time. It affects who is automatically included in the class or must actively choose to be part of the proceedings.

Collective Proceedings Order (CPO)

A CPO is an order that allows multiple claims to be combined into a single collective action, streamlining the process for handling numerous similar claims against a defendant.

Opt-In vs. Opt-Out

Opt-In: Individuals must actively choose to join the proceedings.
Opt-Out: Individuals are automatically included unless they explicitly choose to exclude themselves.

Statutory Discretion

Refers to the authority granted by legislation to a tribunal or court to make decisions based on the specifics of a case, provided they adhere to the legislative intent and purpose.

Conclusion

The decision in Mastercard v Merricks reaffirms the broad discretion vested in tribunals like the Competition Appeal Tribunal when determining key aspects of collective proceedings, such as the domicile date. By setting the domicile date to the Claim Form issuance date, the CAT ensured that millions of claimants with genuine claims were included, thereby preserving the collective proceedings regime's objective to facilitate access to justice.

The judgment underscores the necessity for precise drafting in collective action documents and the judiciary's role in interpreting statutory provisions in alignment with their underlying purposes. Future cases will likely reference this decision to support the flexible yet principled determination of criteria that govern class membership in collective legal actions.

Ultimately, this case sets a precedent that prioritizes the equitable inclusion of claimants and the effective administration of justice over procedural technicalities, reinforcing the collective proceedings framework's integrity and its role in safeguarding consumer rights.