Cabo Concepts v MGA Entertainment (2025)

Cabo Concepts Ltd brought proceedings before the Competition Appeal Tribunal against MGA Entertainment Inc, the manufacturer of popular toy brands. The claim alleged anti-competitive practices in the toy distribution market. The proceedings were supported by third-party litigation funding, reflecting the continued appetite among funders for competition claims before the CAT. The CAT rejected the claim, finding that the applicant had not established the alleged infringement to the required standard. The precise basis for the Tribunal’s rejection touched on issues of market definition, dominance, and the alleged abusive conduct. The decision formed part of an emerging pattern of CAT decisions in 2024 and 2025 demonstrating that the Tribunal applies careful scrutiny to competition claims and that third-party funding does not guarantee success. Alongside the Le Patourel dismissal at trial and the Riefa certification refusal, Cabo Concepts contributed to a more nuanced picture of the risks and rewards of funding competition claims before the CAT.

For the litigation funding industry, the case reinforced the importance of rigorous due diligence and case selection. While the collective proceedings regime has opened up significant opportunities for funders, the growing body of unsuccessful claims demonstrated that these opportunities carry real litigation risk. Funders’ portfolio management strategies must account for a meaningful failure rate across their collective proceedings investments. The decision also highlighted the reputational risk for funders associated with backing unsuccessful claims. While any individual claim may fail on its merits, a pattern of failed funded claims could raise questions about the quality of funders’ case assessment processes and potentially affect their ability to attract future investment. The case underscored the need for funders to balance ambition with discipline in their approach to competition claims.