A Behavioural Analysis of the Future of Collective Redress for Financial Consumers Following the Supreme Court Decision in Merricks v Mastercard

Abstract

One of the biggest problems faced by consumers seeking redress for financial harm is the prohibitive expense and impracticality of bringing low-value individual legal proceedings. The Consumer Rights Act 2015 introduced a new regime for collective redress for competition law infringements whereby for the first time, claims may be brought on an opt-out basis. The new regime was examined by the Supreme Court in its recent decision in Merricks v Mastercard. The Mastercard claim raises important questions about consumer remedies, access to justice, litigation funding and practical enforcement issues. This paper examines the decision through the lens of behavioural science, seeking insights into the availability and accessibility of redress for consumers and considering the implications for the regulation of lenders in the future. The influence of behavioural science on the development of the law is reviewed, the progress of the Mastercard claim and the Supreme Court’s decision is analysed, and some conclusions are proposed about possible future developments and the effectiveness of the collective redress regime from a behavioural perspective.