Innsworth Mastercard Merricks CAT High Court — Lawyer Monthly

The High Court has dismissed Innsworth Capital’s judicial review of the Competition Appeal Tribunal’s decision on funder returns in Walter Merricks’ landmark Mastercard collective action, upholding the CAT’s award of approximately £68 million to Innsworth and rejecting the funder’s bid for £179 million from the £200 million settlement in a judgment handed down by Lord Justice Males sitting with Mr Justice Morris on 10 June 2026.

The Merricks collective action, launched in 2016 on behalf of over 44 million UK consumers alleging that Mastercard’s unlawful multilateral interchange fees had inflated prices across the economy, was valued at approximately £14 billion including interest and became the defining test of the UK’s opt-out collective proceedings regime.

After eight years of litigation through the Competition Appeal Tribunal, Court of Appeal and Supreme Court, significant parts of the claim were held time-barred and the case settled for £200 million — approximately 1.4 percent of the original claim. The CAT created three distribution pots from the settlement: £100 million for class members at a minimum of £45 each, reimbursement of Innsworth’s expenditure of between £41 million and £46 million, and a third pot covering the funder’s profit, further class payments and any residue to the Access to Justice Foundation.

Innsworth, represented by Charles Béar KC of Fountain Court Chambers instructed by Akin Gump Strauss Hauer & Feld, challenged the CAT’s approach on three grounds — arguing the tribunal misread Australian authorities on funder returns, overlooked settlement proceeds remaining after cost reimbursement and wrongly refused to treat a payment obligation to previous funder Colfax as a recoverable expense. Lord Justice Males accepted the CAT had probably misread the Australian cases but found the error immaterial.

The real drivers of the CAT’s decision were the poor outcome for the class and the principle that the collective proceedings regime exists for class members rather than for lawyers and funders. Walter Merricks, represented by Mark Brealey KC of Monckton Chambers instructed by Willkie Farr & Gallagher, described the ruling as complete vindication. Mastercard was represented by Freshfields. Hogan Lovells acted pro bono for the Access to Justice Foundation.

Jeremy Marshall, chief investment officer of Winward Litigation Finance, warned the outcome would put the brakes on funders’ appetite for CAT claims by adding uncertainty over whether funders can rely on their funding agreements.

For competition law and class action practices the ruling establishes that the CAT’s wide powers as a specialist tribunal include significant discretion over funder returns where the class outcome is poor — and that funder agreements will not be treated as determining the distribution question.

Law firms advising litigation funders on UK collective proceedings must now ensure funding agreements are structured with explicit provisions addressing the CAT’s distribution discretion and the risk that poor class outcomes will reduce funder returns well below contractual expectations.