In a landmark judgment on July 4, 2018, the Court of Appeal of England and Wales decided in favour of Compass Lexecon’s clients on the lawfulness of interchange fees.
The Court relied heavily on Compass Lexecon’s Neil Dryden in its decision, making numerous references in its conclusions to Mr. Dryden’s “framework” for balancing the costs and benefits of interchange fees. In particular, the Court held that Mr. Dryden’s framework identified “a critical aspect of the balancing exercise required”; the Court adopted Mr. Dryden’s nomenclature for critical variables, and agreed with Mr. Dryden’s key proposition that the proportion of “always card” transactions (i.e., transactions that would have occurred anyway without interchange fees) and the level of issuer to cardholder pass-through were critical issues to whether interchange fees created net benefits; and the Court agreed with the contention of the claimants that the failure to assess the level of pass-through was “fatal” to MasterCard’s case for exemption.
The Court also found, consistent with the evidence of Mr. Dryden and contrary to MasterCard’s expert, that business stealing was not a benefit within the relevant statutes.
Mr. Dryden was assisted by a team at Compass Lexecon including Vice Presidents Laura Phaff and Stefano Trento. Other team members included Catalina Campillo, Gwilhem Charbonnier, Scott Holbrook, Vilen Lipatov, Abbas Mohsin, Orjan Sandewall, Segye Shin and Daniel Westrik.
Compass Lexecon worked closely with counsel from Stewarts Law LLP including partners Stuart Carson, Inge Forster, Kate Pollock and Jonathan Sinclair, and also Matthew Akroyd, Nick Haworth, Leah Keen, Mark Lewis, Zachary Sananes, Matthew Tighe and William Towell.
Compass Lexecon also worked closely with the barrister team including, at the appeal stage, Jon Turner QC, Meredith Pickford QC, Christopher Brown and Max Schaefer.