Mark McLaren v MOL [2025] CAT 4

In these collective proceedings concerning the roll-on roll-off vehicle shipping cartel, the CAT addressed an issue of considerable practical importance to the litigation funding market: the likely take-up rate among class members in opt-in collective proceedings. The take-up rate refers to the proportion of eligible class members who actually come forward to register their claims and receive their share of any damages awarded. This metric is critical for litigation funders because their returns typically depend on the aggregate damages that are actually distributed, not merely the headline quantum of the award. A low take-up rate could significantly reduce the total damages pool from which the funder’s return is drawn, potentially making an otherwise successful claim economically marginal from the funder’s perspective.

The CAT heard evidence from experts on both sides regarding the expected take-up rate, taking into account factors such as the nature of the affected class, the size of individual claims, the costs and complexity of the registration process, and comparable take-up rates in other jurisdictions and types of proceedings. The Tribunal’s analysis of take-up rates had broader implications beyond the McLaren proceedings. Take-up rate assumptions are a key input in the financial models used by litigation funders to assess the viability of collective proceedings investments. If take-up rates are lower than expected, the funder’s return may be diminished even where the claim succeeds on liability and quantum. This creates an additional layer of risk for funders that is distinct from the more commonly discussed risks of litigation failure. The decision provided valuable empirical data for the funding industry’s understanding of how take-up rates are likely to be assessed by the CAT, informing future investment decisions and the structuring of funding arrangements in collective proceedings.