At the end of 2024, after a nine-year legal battle, Walter Merricks confirmed that under a proposed settlement, without any admission of liability, Mastercard agreed to pay £200m in exchange for the opt-out class representative action being discontinued.[1]

By way of background, Merricks acts as a class representative for over 46.2 million consumers,[2] alleging that they have suffered a collective loss of £14bn between 1992 and 2008 due to Mastercard’s practices.[3] In particular, it is alleged that Mastercard imposed unlawful fees on transactions processed through its network during this time.[4]

The settlement, which is subject to the approval of the Competition Appeal Tribunal (CAT), aims to resolve claims that these fees led to higher costs for businesses and consequently, consumers. From the settled sum, £100m would be distributed to everyone who submitted a claim equally. To put this into perspective, provided all come forward, each individual will be entitled to £2.27.[5] The remaining £100m would be split between the litigation funder, Innsworth Capital, and consumers. The CAT will only approve the settlement if it considers it to be “just and reasonable” and in the best interests of the class. The settlement hearing is due to take place on 19 and 20 February 2025.

However, in a dramatic turn of events, Innsworth, has since reportedly initiated LCIA arbitration proceedings against Merricks on the basis that Merricks' agreement to the settlement figure is in breach of the litigation funding agreement.[6] According to Merricks' witness statement[7] which is available on the Mastercard Consumer Claim website, Innsworth had been hoping to receive a return of around £400m under the litigation funding agreement, double what has been agreed in the settlement. 

Merricks, however, is adamant that the terms of the settlement agreement are just and reasonable- “I have agreed a settlement that I believe will deliver meaningful compensation to class members who choose to come forward…”.[8]

In an even stranger twist, despite the bitter years of legal warfare, Mastercard has even stepped in to offer Merricks the sum of £10m to deal with the arbitration threat against him personally.[9]

The situation highlights the intricate dynamics between litigation funders and class representatives in large-scale class actions and serves as a cautionary reminder about the potential for misunderstandings and conflicts over distribution of settlement funds, or the funder’s return on investment. We will watch this claim closely as it advances to the next stages of legal proceedings, both in the CAT and now in arbitration (to the extent that we can).

• [1] John Hyde, “Mastercard Litigation: £2 for each claimant, up to £100m for funder” [2025] The Law Society Gazette
• [2] Mastercard Incorporated and others (Appellants v Walter Hugh Merricks CBE) Respondent [2020] UKSC 51
• [3] ibid.
• [4] ‘About the Claim’ (Mastercard Consumer claim, Merricks v Mastercard) www.mastercardconsumerclaim.co.uk accessed 30 January 2025
• [5] ibid.
• [6]https://www.mastercardconsumerclaim.co.uk/Content/Documents/Fourth%20Witness%20Statement%20of%20Walter%20Merricks.pdf
• [7]Paragraph 47 of the Fourth Witness Statement of Walter Hugh Merricks CBE
• [8] “Latest news” (Mastercard Consumer claim, Merricks v Mastercard) www.mastercardconsumerclaim.co.uk accessed 30 January 2025
• [9]Paragraph 58 of the Fourth Witness Statement of Walter Hugh Merricks CBE