The litigation financier in the colossal class action lawsuit against Mastercard is preparing to take legal action against its own class representative after he settled a £10bn case for a mere £200m.
The case, which centred around alleged overcharging of interchange fees on Mastercard debit and credit cards, concluded last month following a nine-year legal battle that reached the Supreme Court, as reported by .
This was the first case under the Ƶ’s 2015 Consumer Rights Act, which permits collective proceedings in competition matters. It also followed the European Commission ruling that found Mastercard's interchange fees violated EU laws.
Lawyer Walter Merricks led this class action, with Innsworth Capital providing funding up to £60.1m, plus an additional £15m to cover defendant costs if unsuccessful. The claim sought compensation of approximately £10bn, but it was disclosed in December that it settled for £200m.
Documents unveiled on Thursday showed that half of the settlement sum, £100m, would be equally distributed to all who submitted a claim, estimated to be around 44 million people, equating to £2.27 each. The remaining £100m "will be used to pay the litigation funder."
The funder indicated they would contest the settlement and claimed that Merricks would be violating his obligations under the litigation funding agreements.
In his witness statement, Merricks expressed that "despite this stance taken by Innsworth, I remained of the view that the interests of the class were best served by agreeing the £200m settlement, so I indicated to Mastercard that I was minded to accept the offer."
He also noted in his statement that due to this decision, Innsworth Capital is intending to initiate arbitration proceedings against him, which includes a claim for damages. He detailed how, upon informing Mastercard of the impending claim by Innsworth, Mastercard decided to make £10m available "in order to deal with the threatened arbitration against me."
Seema Kennedy, executive director at Fair Civil Justice, remarked on the advancements: "this claim shows why reform is so badly needed, and we will continue to call on the Government to introduce measures to improve transparency and accountability of the funding sector."
It's worth remembering that the new government, as of last August, has postponed the Litigation Funding Bill until after a review, which may not conclude before Summer 2025.
