A major decision handed down last week by the UK Supreme Court could drastically alter the country’s litigation and business environment, making it easier for plaintiffs’ law firms and financiers to bring collective actions (known as class actions in the US). ILR’s newest blog post takes a look at the possible impacts of this ruling.
The Court’s Merricks v. Mastercard decision lowered the bar for the certification of class action lawsuits in the first major test of a new system created in 2015. The £14 billion collective action was brought on behalf of 46.2 million people—nearly every single UK consumer. The case alleged that all consumers between 1992 and 2008 paid inflated prices because of unlawful fees Mastercard charged retailers.
The effects of the Supreme Court’s ruling are obvious—and deeply troubling. The CAT was designed to ensure that lawsuits brought under the Consumer Rights Act were reasonable claims that could be resolved through litigation. Unfortunately, this decision largely strips the CAT of its ability to act as an effective gatekeeper. Instead, the lawsuit floodgates might open, allowing lawyers and litigation funders to team up and file dubious lawsuits intended to pressure defendants to settle.