Merricks v Mastercard [2025] CAT 28

The Merricks v Mastercard collective proceedings were among the most prominent and long-running competition claims in the CAT’s history. Walter Merricks CBE had been appointed class representative to bring opt-out collective proceedings on behalf of approximately 46 million UK consumers alleging that Mastercard’s multilateral interchange fees were set at anti-competitive levels. The original claim was valued at over £10 billion. After years of procedural battles, including a trip to the Supreme Court on certification, the parties reached a proposed settlement of approximately £200 million. The settlement required approval by the CAT under Rule 94 of the CAT Rules. Unusually, the litigation funder Innsworth Capital opposed the settlement, arguing that it was inadequate relative to the claim’s potential value and that the proposed distribution was unfair to the funder. Under the proposed distribution, over £100 million would be allocated to the class and approximately £68 million to Innsworth. The funder argued that this did not adequately reflect its financial risk and investment in the proceedings.

The CAT approved the settlement on 20 May 2025, holding that it was fair, reasonable, and in the interests of the class as a whole. The Tribunal considered the funder’s objections but concluded that the settlement represented a reasonable outcome given the litigation risks, the costs of proceeding to trial, and the uncertainty of damages quantification. The CAT emphasised that the interests of the class took priority over the commercial interests of the funder. Innsworth subsequently filed for judicial review of the CAT’s approval decision, raising important questions about the rights of litigation funders to challenge settlement terms and about the CAT’s approach to balancing funder and class interests. The case highlighted the potential for tension between funders and class representatives over settlement strategy and distribution, a dynamic likely to recur as more collective proceedings approach resolution.