Gutmann v Apple [2025] EWCA Civ 459

In the Gutmann collective proceedings against Apple, the CAT considered a distinct but related aspect of litigation funding arrangements: whether the Tribunal had jurisdiction to approve so-called waterfall provisions that prioritised the litigation funder’s payment from any damages recovered before any distribution to class members. The underlying competition claim alleged that Apple had abused its dominant position through excessive App Store commissions. The class representative proposed an LFA containing waterfall provisions under which the funder would receive its agreed return from the aggregate damages before the remainder was distributed to the class. This raised a fundamental question about the CAT’s powers under the Competition Act 1998 and the CAT Rules. The Tribunal held that it had jurisdiction to sanction such arrangements. It reasoned that the CAT’s broad case management powers, read together with its obligation to ensure that collective proceedings are conducted fairly and efficiently, extended to approving the terms on which funded proceedings would operate, including the priority of payment from any damages fund.

The Tribunal further held that the waterfall structure was appropriate in the circumstances of these proceedings. The practical significance of waterfall provisions is considerable. Without them, funders face the risk that their returns would be subordinated to class member distributions, potentially making collective proceedings economically unviable from a funding perspective. The ability to secure priority of payment is a key component of the funding model that underpins most collective proceedings before the CAT. Apple was granted permission to appeal on the waterfall jurisdiction point. The appeal was heard by the Court of Appeal in Gutmann v Apple [2025] EWCA Civ 459, where Lord Justice Flaux upheld the CAT’s decision. Apple was subsequently granted permission to appeal further to the Supreme Court, where the matter remains pending as of February 2026.