Innsworth Capital Challenges Mastercard Settlement in Walter Merricks Case.
The US-based litigation funder, Innsworth Capital, has announced its intention to challenge the proposed settlement between Mastercard and claimant Walter Merricks in the extensive Competition Act group claim. The settlement, which was revealed earlier this week, will soon be presented to the Competition Appeal Tribunal (CAT) for approval. Innsworth’s decision to contest the agreement introduces further uncertainty into a case that has already endured nearly a decade of legal proceedings.
Innsworth Capital’s Objections to the Settlement
Innsworth Capital, which has been a significant player in funding the group claim against Mastercard, has expressed dissatisfaction with the terms of the settlement. The firm contends that the settlement amount, which is reported to be around £200 million, is insufficient given the original £10 billion valuation of the claim. Innsworth argues that the agreement does not adequately compensate UK consumers, a position that has led the funder to announce its intention to challenge the settlement in the upcoming tribunal hearing.
The £200 million settlement is a fraction of the initial claim, representing just 2% of the original valuation. However, despite its comparatively small figure, the settlement is seen as a significant resolution, as it provides a pathway to compensation for consumers who would not have been compensated had the case continued further.
Merricks’ Solicitor Responds to Innsworth’s Criticism
Boris Bronfentrinker, the solicitor representing Walter Merricks from the law firm Willkie Farr & Gallagher, has dismissed Innsworth’s objections, describing them as “unfortunate yet predictable.” He emphasized that after nearly nine years of litigation, which included numerous hearings before the Competition Appeal Tribunal, appeals to the Court of Appeal, and a landmark Supreme Court judgment, both Merricks and Mastercard had reached a settlement that reflects the realistic value of the claim.
“This case has been through an exhaustive legal process,” said Bronfentrinker. “After years of litigation, including significant judicial reviews and decisions clarifying the claim’s value, we are confident that this settlement represents the best possible outcome for UK consumers. The evidence now available has provided a much clearer understanding of the claim’s value, which will be detailed in the application submitted to the tribunal.”
He further criticized Innsworth’s efforts to exert pressure on Merricks, stating that the funder’s challenge is part of a broader strategy to control the litigation process for its own financial gain. “While most litigation funders respect the boundaries of their involvement, Innsworth has repeatedly attempted to influence Mr. Merricks’ decisions to pursue litigation that could lead to far lower or no compensation for consumers,” Bronfentrinker asserted.
Concerns Over Litigation Funding and Public Policy
The dispute between Merricks and Innsworth Capital underscores broader concerns over the role of litigation funders in large-scale group claims. Litigation funders are essential to financing high-cost legal battles, especially in competition law cases. However, their involvement often raises questions about conflicts of interest, the prioritization of financial returns over claimant interests, and the potential for funders to influence legal strategies for their own benefit.
Bronfentrinker noted that the dispute is symptomatic of a wider issue within the litigation funding industry. “Innsworth’s stance highlights a troubling trend where funders attempt to manipulate the process for their own financial advantage, often at the expense of fair and equitable outcomes for consumers,” he said. “It is critical that the tribunal takes these concerns into account when reviewing the settlement.”
The Potential Impact on UK Consumers
Despite Innsworth’s objections, the settlement offers a significant opportunity for UK consumers who were affected by Mastercard’s alleged anti-competitive practices. According to Bronfentrinker, the settlement would provide compensation to affected consumers, with each claimant expected to receive approximately £40 to £50.
“The settlement represents a far more favorable outcome for UK consumers than continuing with uncertain litigation that could yield nothing or very little,” Bronfentrinker explained. “After nearly a decade of legal challenges, this settlement ensures that funds will be returned to consumers who have suffered as a result of Mastercard’s conduct.”
While the settlement amount is smaller than the original claim, it provides a tangible remedy for those who would otherwise have seen no compensation. The tribunal’s approval of the settlement is now crucial to ensuring that these consumers are compensated fairly.
The Role of Litigation Funders and Industry Scrutiny
Innsworth’s opposition to the settlement has sparked concern within the litigation funding industry, which is currently under heightened scrutiny by the UK government. The government is considering regulatory reforms to address the growing influence of litigation funders in class actions, particularly in competition law cases where the financial stakes are high.
The ongoing debate about the regulation of litigation funders is likely to intensify in light of Innsworth’s challenge. Critics argue that litigation funders should be more transparent about their roles and interests in such cases to prevent undue influence over the litigation process. How the Competition Appeal Tribunal handles this dispute could set important precedents for how litigation funding is regulated in the future.
Seema Kennedy, the executive director of the business-supported initiative Fair Civil Justice, stated: “The settlement figure suggests around £4 per eligible claimant. Depending on how much the lawyers and class action investors take before the claimants are paid, this £4 figure could drop.”
For Walter Merricks and his legal team, the settlement represents the culmination of nearly a decade of tireless litigation. If approved, it will bring closure to a case that has had profound implications for competition law in the UK. For UK consumers, it offers the prospect of compensation that would not have been possible without the persistence of the claim.
The lawsuit involving Walter Merricks and Mastercard has been ongoing since 2016. Merricks, a former ombudsman, originally filed the group claim under the Competition Act 1998, alleging that Mastercard had charged excessive fees to UK consumers, which he argued amounted to anti-competitive behavior.
The case has been a lengthy and complex legal battle, involving numerous hearings before the Competition Appeal Tribunal (CAT), as well as appeals to the Court of Appeal and a landmark Supreme Court ruling in 2021. The Supreme Court decision allowed the case to proceed as a collective action, a significant moment in UK competition law.
After nearly nine years of litigation, a settlement agreement was reached between Merricks and Mastercard in 2024, but Innsworth Capital, a litigation funder involved in the case, has since raised objections to the settlement, leading to further legal proceedings.
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