Apple v Gutmann (UKSC/2025/0103)

Apple has been granted permission to appeal to the Supreme Court against the Court of Appeal’s decision in Gutmann v Apple [2025] EWCA Civ 459, which upheld the Competition Appeal Tribunal’s jurisdiction to approve waterfall provisions in litigation funding agreements. The central question before the Supreme Court is whether the CAT has the power to sanction arrangements under which the litigation funder’s return is paid from aggregate damages before any distribution to class members. The waterfall issue is of fundamental commercial significance to the litigation funding model in collective proceedings. Funders invest substantial capital in supporting claims that may take years to resolve, and the ability to secure priority of payment from the damages fund is a key component of the risk-return calculus that underpins their investment decisions. If the Supreme Court were to hold that the CAT lacks jurisdiction to approve waterfall provisions, it could significantly affect the commercial viability of funding collective proceedings, as funders would face the risk that their returns would be subordinated to class member distributions. Apple’s appeal raises constitutional questions about the scope of the CAT’s powers under the Competition Act 1998.

Apple argues that Parliament did not intend to confer on the CAT the power to approve commercial arrangements between class representatives and their funders, and that the Tribunal’s jurisdiction is limited to matters directly related to the conduct of proceedings and the distribution of damages. The class representative and funder counter that the CAT’s broad case management powers necessarily encompass the authority to approve the financial arrangements that make collective proceedings possible. The appeal is being closely watched across the litigation funding industry, as the outcome will affect the structuring of funding arrangements in all future collective proceedings before the CAT. A ruling against waterfall provisions could prompt legislative intervention to preserve the funded collective proceedings model.