Millions of consumers will each be able to claim compensation of between £45 and £70 after the Competition Appeal Tribunal gave its approval yesterday to the settlement of long-running litigation against Mastercard.
The credit card company agreed to pay £200 million in settlement of a class action originally valued at £14 billion, thought to be the largest claim ever litigated in the courts of England and Wales.
Compensation will be available to as many as 44 million adult consumers who bought goods in UK shops that accepted Mastercard between 1992 and 2008. Crucially, it is not confined to people who used Mastercard or any other credit card for their purchases. A claim form will be published online in the coming weeks.
The class of claimants was represented throughout by Walter Merricks CBE (pictured yesterday at his lawyers’ office in London). He told me yesterday why the claim had been brought and why he had settled for less than 1.4% of its original value.
He also told me about his fears and feelings on being sued by his own litigation funders, Innsworth Capital, who opposed the settlement. In an unprecedented move, Mastercard offered to pay Merricks up to £10 million to defend him against the threat of being bankrupted by Innsworth.
The litigation funder will be repaid the £45.5 million it has invested in Merrick’s legal fees plus an additional 50%.
Its managing director Ian Garrard said it would receive a return of less than 15% of what it described as the £150 million surplus, despite taking all the risk.
“We do not think it is a reasonable division of the proceeds, or one that will do anything to encourage investors to fund other opt-out collective actions,” he said. “We are therefore considering all of our options, including asking the courts to look again at this matter.”
A spokesperson for Innsworth added: “Innsworth has at all times acted in accordance with its rights and obligations under the litigation funding agreement. There are no findings regarding Innsworth’s conduct in the judgment.”
Some idea of the complexity of the case can be seen from the tribunal’s reference to the claimant’s “Re-Re-Re-Re-Re-Amended Reply” and his “Re-Re-Amended Claim Form”.
Merricks spoke to me exclusively yesterday for A Lawyer Talks. My regular podcast is a bonus for paying subscribers to A Lawyer Writes. Everyone else can hear a short taster by clicking the ► symbol above.
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