Mastercard's recent settlement in favor of British consumers faced criticism on Wednesday, potentially discouraging funders from participating in the UK's growing class action sector. The global payment giant reached an agreement in December to resolve a longstanding legal dispute over card fees amounting to £200 million, significantly less than the lawsuit's earlier estimated value of £10 billion ($12.6 billion).
Should all 44 million claimants in the class action seek compensation, they would each roughly receive £2.27, a nominal amount. Innsworth Capital, a key funder, objected to the deal as they stand to claim half of the settlement, leaving the remaining £100 million for consumers.
The Competition Appeal Tribunal in London now faces the task of evaluating this contested settlement, marking a milestone in the brief history of Britain's class action framework. The sector had been under scrutiny following a 2023 ruling that rendered numerous funding agreements null and void.
In a separate challenge for funders, the Court of Appeal is set to review the legality of agreements funding cases against [needs proper completion] later this year. Innsworth Capital, spending over £45 million to support the Mastercard case, deems the settlement allocating its costs plus £55 million as "unfair."
Consumer advocate Walter Merricks, the case's lead, alongside Mastercard, argue that economic analysis pegs the claim's value below £200 million after crucial legal setbacks diminished the lawsuit's scope.