Litigation funders take on great risk in class action cases. The CAT’s intervention on Merricks v Mastercard could ultimately come at the cost of consumers, writes Craig Lonie

When the Competition Appeal Tribunal (CAT) recently approved the settlement in the long-running Merricks v Mastercard litigation, attention understandably focused on its scale – a claim for 46m consumers once valued at up to £14bn, eventually settled for £200m.

But tucked away within the judgement is a subtler, and potentially more destabilising, development: the Tribunal’s decision to revise the financial terms agreed between the class representative and the litigation funder.

In doing so, the CAT crossed a line that should concern anyone interested in the future of collective redress in the UK. It did not simply scrutinise the legality of the funding arrangement – it effectively rewrote it, by capping the payout to the litigation funder, Innsworth Advisors. That sets a troubling precedent for litigation funders and risks chilling the very investment that underpins access to justice in complex group claims.

How the CAT intervened in Merricks v Mastercard

The core of the issue lies in the CAT’s determination of how the settlement should be distributed, which departed........

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