ILR President: “Only the UK Supreme Court Can Now Prevent a US-style Litigation Monster”
03rd Jul 2019
In a Law Society Gazette commentary piece, Lisa A. Rickard, the president of the U.S. Chamber Institute for Legal Reform, said a case potentially before the UK Supreme Court is the only thing separating the UK legal system from a “US-style litigation monster”.
Merricks v. Mastercard, a £14 billion collective action lawsuit, represents the first true test of the Consumer Rights Act of 2015, which created a collective action mechanism in the UK. The Competition Appeal Tribunal (CAT), which Rickard said was designed to “ensure that proposed collective actions are suitable for class certification, and not just a way for claimants’ lawyers to over-inflate settlements”, originally rejected the lawsuit. That CAT said it would impracticable to certify the proposed class of 46 million people that were allegedly harmed by credit card fees.
Earlier this year, though, the Court of Appeal reversed the decision. The issue now, Rickard says, represents the “heart of the Consumer Rights Act”. The “authority of the CAT court and what constitutes a reasonable consumer class” is now on the line. Litigation funders are already circling the case. The original funders, who invested £40 million to fuel the case, may make up to £1 billion. A system that encourages investors to take settlement money “is not a system that is just and fair for consumers”, Rickard said.
Rickard urged the Supreme Court to take up the case and “restore the CAT’s gatekeeping authority on class certification, otherwise lawsuits of questionable merit will flood UK courts”. She called this potential flood a US-style “litigation monster”, which was exactly what those who debated the Consumer Rights Act wanted to avoid. Rickard pointed to then- Secretary of State for Business, Innovation and Skills Vince Cable, who said a runaway system would create “constant litigation, which would be costly and benefit only lawyers”.
“If the UK Supreme Court does not clearly define the rules of this new system”, Rickard said, “it will have helped to create a litigation monster that will prove wrong all those reassuring lawmakers who helped create the Consumer Rights Act”.