The Competition Appeal Tribunal’s decision against Innsworth underscores ongoing concerns about a litigation funding industry that continues to prioritize profit over the proper administration of justice. Image Source: Alamy

Earliest this month, the Competition Appeal Tribunal (CAT) in the UK ordered Innsworth to pay nearly £1 million to Merricks and MasterCard to cover the costs of its failed attempt to block the £200 million settlement.

The case stems from a 2007 European Commission finding that MasterCard’s multilateral interchange fees in the European Economic Area breached EU competition law between 1992 and 2007. In 2016, Walter Merricks launched a collective action on behalf of roughly 44 million UK consumers, claiming that the fees had been passed through to retail prices. The action, covering 1992 to 2008 with a run-off period to 2010, became the largest consumer claim in UK history, with a potential value of around £14 billion—rising to nearly £20 billion including interest.

After nearly nine years of litigation, the parties agreed a £200 million settlement earlier this year. Innsworth challenged the deal primarily on the grounds that the payout was insufficient to satisfy its expected return. Under its funding agreement, Innsworth maintained it was entitled to a minimum return far above the roughly £68 million awarded despite the amount covering costs plus a 50% profit margin. The firm also contested the timing of the settlement and the proposed distribution plan, objecting to allocations for consumer groups and a charitable contribution, which it viewed as diverting funds away from its expected financial gain.

“Innsworth challenged the deal primarily on the grounds that the payout was insufficient to satisfy its expected return.”

The CAT rejected those arguments. Furthermore, in its latest ruling on 31 October, delivered on the papers, the tribunal held that Innsworth’s intervention had “substantially increased” costs for both Merricks and MasterCard, and that the funder should therefore bear those expenses. It awarded interim payments of £232,000 to Merricks and £194,000 to MasterCard, alongside further sums for the costs of the costs applications. After VAT and related adjustments, Innsworth’s total liability will approach £1 million.

The tribunal also dismissed Innsworth’s attempt to have its own costs deducted from the settlement fund, calling such an outcome “perverse” because it would reduce payments to the consumer class. It likewise refused the funder’s request for immediate access to more than £41 million from the settlement, holding that any payment must await resolution of Innsworth’s ongoing judicial review of the approved distribution scheme.

Innsworth made a perverse attempt to have its own costs of blocking the settlement deducted from the very settlement fund.

Merricks welcomed the tribunal’s ruling and confirmed that Innsworth’s intervention had hindered efforts to deliver compensation to the public, stating that Innsworth had been “determined to try anything and everything” to stop the funds from reaching the UK consumers until its own financial interests were met. Innsworth, for its part, said the costs order was “disappointing” and warned it could deter funders or other third parties from raising legitimate challenges to settlements in the future.

“Innsworth had been ‘determined to try anything and everything’ to stop the funds from reaching the UK consumers until its own financial interests were met.”

Innsworth’s objections—ranging from the value of the settlement to the apportionment of returns—once again reminds of concerns about potential conflicts between funders seeking commercial recovery, consumers seeking closure, and the best interests of the justice system.

These issues echo wider debates seen in other recent global disputes involving major funders, including Therium, whose involvement in cases such as Gbarabe v. Chevron Corp and the Sulu arbitration has been extensively covered on KnowSulu.

Those cases have raised concerns about the influence of litigation funders and the potential conflict between their financial interests and the process of justice. In Gbarabe v. Chevron Corp, Therium exercised the right to influence and even block mediation, illustrating how funders can shape key decisions in litigation in the interests of profit.

In the Sulu arbitration, the funder’s involvement has been described as significant but opaque, highlighting questions about the scale and transparency of their influence. Therium’s attempt to pursue an $18 billion claim against the Spanish government, despite its low likelihood of success, underscores how commercial incentives can drive desperate litigation strategies.

“Therium’s attempt to pursue an $18 billion claim against the Spanish government, despite its low likelihood of success, underscores how commercial incentives can drive desperate litigation strategies.”

As the judicial review proceeds, the CAT’s costs ruling signals a broader warning: funders may face financial consequences when their attempts to influence settlement outcomes fall outside what courts view as fair or constructive.

REFERENCES

ICLG. (2025, November 4). Funder hit with hefty costs bill after failed bid to block settlement. https://iclg.com

KnowSulu. (2025, November 12). Sulu claimants’ desperate $18 billion claim against Spain thrown out. https://knowsulu.ph

KnowSulu. (2025, October 29). Therium’s activity underscores national security risks in litigation funding. https://knowsulu.ph

Macfarlanes. (2025, July 17). Merricks v Mastercard settlement: A landmark judgment and its implications for funders. https://www.macfarlanes.com