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Arcadia Group Brands & others v Visa Inc & others

Visa interchange fee litigation: The Court of Appeal upholds decision to strike out retailers’ historic interchange claims as being time-barred

The Court of Appeal handed down judgment in Arcadia Group Brands and others v Visa Inc and others [2015] EWCA Civ 883, dismissing appeals and upholding the earlier judgment of Simon J striking out claims for damages, estimated to amount to £500 million, by a number of well known high street retailers, including Asda, B & Q, Debenhams, Argos, and Morrisons against Visa.

In an important decision in the context of limitation of competition law damages claims, the Court of Appeal has held that all claims dating from between 1977 and 2007 are time-barred and that the retailers are not entitled to rely upon an allegation of deliberate concealment of relevant facts in order to extend the limitation period for claims for losses going back to 1977.

Arcadia and other retailers have brought claims against Visa Europe and Visa Inc for damages for breach of EU, UK and Irish competition law, alleging that the price they have paid for accepting credit and debit cards has, since 1977, been inflated as a result of the multilateral interchange fee (“MIF”) set by Visa.  Under the Visa rules, when a customer uses a Visa credit or debit card at a retailer, the retailer’s bank pays to the customer’s bank an “interchange fee” which is at the rate of the MIF, where there is no bilateral agreement between the two banks.  The retailers allege, and Visa denies, that the MIF is an unlawful restriction of competition under competition law.

In response to Visa’s case that all claims dating from before the primary six year limitation period are barred, the retailers contended that Visa had deliberately concealed a number of relevant facts which remained concealed, thereby extending the limitation period,  under s.32(1)(b) Limitation Act 1980, to cover claims going back as far as 1977.

Visa argued that the facts alleged to have been deliberately concealed did not amount to “facts relevant to the right of action” within s.32(1)(b).  Rather all such facts had been public knowledge for some considerable time before 2007 and the Claimants had been able to plead their claims without knowledge of the facts which they claimed remained concealed. 

The Court of Appeal has held, following an established line of earlier authority, that the relevant facts for the purposes of s.32(1)(b) are only those facts which are sufficient to plead a prima face claim.  The fact that competition law claims may be complex does not mean that they are to be treated, for the purposes of limitation, in principle in any way different from other claims.   The Claimants here had been able to plead the facts to establish the ingredients of an infringement of Article 101(1) TFEU and the European Commission’s decision in the MasterCard case in 2007 had not disclosed any new facts.  Significantly, the Court of Appeal held that facts relevant to the issue of exemption under Article 101(3) are not “relevant facts” and so any concealment of such facts does not stop time running.

The Court also rejected the retailers’ EU law arguments.  A six-year limitation period for competition law claims, with the benefit of s.32(1)(b) postponement, is not incompatible with the EU principle of effectiveness.  The recently enacted Damages Directive had no application to the present case and does not merely give effect to the existing law. The EU law position was clear and there was no basis for a reference to the Court of Justice of the European Communities.

Stephen Morris QC (instructed by Linklaters LLP) acted for the successful lead applicants, Visa Europe