Credit card group MasterCard is being sued for £14bn, the largest legal claim in British history, in a landmark lawsuit over allegations that it overcharged 46m UK consumers.

The claim, which MasterCard said it would oppose vigorously, is the first major case under a new framework for class action lawsuits on behalf of multiple claimants. It revolves around fees imposed by MasterCard on businesses that accepted its debit and credit cards between 1992 and 2008.

Law firm Quinn Emanuel, which filed the suit at the Competition Appeal Tribunal, alleges that these charges – known as “interchange fees” – were set at an unlawfully high level and pushed up prices for British consumers.

The claim was brought by Walter Merricks, the UK’s former chief financial services ombudsman, on behalf of around 46m consumers he claims have lost out.

It follows a 10-year legal battle between MasterCard and the European commission that ended in 2014 with the European court of justice concluding that the credit card firm’s fees for cross-border transactions were too high.

In a long statement on its website, the law firm said MasterCard has spurned a chance to settle with the commission, instead of choosing to fight its case through the courts.

“MasterCard lost this battle at every level and showed complete disregard for its cardholders and consumers at large, focusing instead on generating unlawful profits,” Quinn Emanuel said in a statement.

Merricks, who spent 10 years in charge of oversight of British financial firms, said: “The filing of this claim is the first step towards consumers obtaining compensation for what MasterCard did.

“MasterCard charged billions of pounds of unlawfully high fees for its sole benefit and to the detriment of consumers. It has already been found to have broken competition law, the basis of which was to protect consumers, and that cannot be disputed.

“There is no basis upon which MasterCard can contend that its card fees were not unlawful.”

He said that because MasterCard’s fees had already been ruled unlawful in the European court, the claim need only prove that consumers suffered losses as a result.

Under the UK’s framework for lawsuits on behalf of multiple people, which was overhauled in the Consumer Rights Act of 2015, anyone who lost out is automatically eligible for compensation unless they opt out explicitly.

Boris Bronfentrinker, a Quinn Emanuel partner, said: “Despite criticising this action publicly in July and further insulting consumers by referring to the UK’s new collective action regime as ‘unfortunate’, MasterCard has since turned over evidence [witness statements and expert reports] that allows us, even at this early stage, to robustly value the claim at £14bn.

“They are now preparing for a tough legal battle which we estimate will go to trial in 2018 unless they are prepared to make UK consumers a fair settlement offer before then.”

He said MasterCard had made “no effort” to compensate consumers who lost out, despite acknowledging that the fees had been passed on to them.

“It is not clear how MasterCard can now turn around and argue the opposite to prevent our case from succeeding,” he added.

MasterCard said: “Now that the claim has been filed, we will take time to review it in detail, however we continue to firmly disagree with the basis of this claim and we intend to oppose it vigorously.

“We deliver real value through the benefits of security, convenience and consumer protection, and we are committed to investing in our payment services in order to continue to meet the rapidly evolving needs of all our customers.”

In a separate blog post, the company said interchange fees are good for consumers and said similar cases in the US had been thrown out of court. Interchange fees are paid by a retailer’s bank to the bank that issued a credit card used in any transaction. The retailer’s bank then charges the retailer to cover its cost. The fees are fixed by credit card companies and are often incorporated into the prices that shops then charge consumers.

Funds linked with Chicago-based Gerchen Keller Capital, the world’s largest litigation funder, will provide up to £40m to fund the litigation.

There has been one previous case under the new rules on collective action lawsuits, on behalf of pensioners who claim they paid too much for their mobility scooters. But the case against MasterCard is the first to test rules intended to allow suits on behalf of vast numbers of claimants.