The Competition Appeals Tribunal (CAT) has approved a settlement of £200m in the long-running Merricks v Mastercard dispute. The tribunal’s ruling dismisses a challenge to the settlement from Innsworth Advisors, the litigation funder backing the claim, that held that the settlement was too low.
The claim, brought by class representative and former financial ombudsman Walter Merricks, sought redress on behalf of 46 million UK citizens, arguing that interchange fees charged by Mastercard on cross-border transactions between 1992 and 2008 caused UK consumers to pay higher prices.
‘I am very pleased that after more than 8 years, where I have given my all to get the best result possible for UK consumers, that the Tribunal has today confirmed that the settlement I agreed with Mastercard is just and reasonable – in fact, the Tribunal went as far as to say it had no doubt about that’, said Merricks in a statement.
He continued: ‘I had clearly hoped to have recovered more, but the case and facts developed in a way meant I could recover less than I initially planned, but I recovered the best amount possible. I now look forward to distributing the settlement to get it in the hands of UK consumers.’
Around half of the £200m settlement would be paid to Innsworth, according to court documents, with around £45.6m for costs and £54.4m as a return on investment. The remaining £100m would be distributed evenly among all those who came forward to claim – an estimated maximum of around 44m people, according to the settlement application. This means final payouts could be as low as £2.27 per person.
The settlement agreement also included a commitment from Mastercard to pay Merricks’ costs up to £10m in arbitration proceedings that Innsworth has initiated against him personally.
The case, featured in LB‘s cases of the year in both 2024 and 2023, was the first opt-out collective proceedings claim brought under the new regime established by the Consumer Rights Act 2015. The claim was first brought in 2016 and became emblematic of the fortunes of the collective actions regime through the CAT’s initial refusal of certification, the protracted appeals process, the CAT’s reversal in 2020, and the Supreme Court’s 2021 ruling upholding certification.
At its peak, the claim was valued at £17bn.
Boris Bronfentrinker, who led the Willkie team advising Merricks, said in a statement: ‘This has been the culmination of more than 8 years of hard work. Mr Merricks and his entire team of advisors have fought as hard as possible over that time to get the best possible outcome. There have been over 30 rulings, multiple trips to the Court of Appeal and also to the Supreme Court. Mr Merricks has had to adapt as the case and the facts evolved, but he secured the best possible outcome, which the Tribunal today said it had no doubt was the case.’
He added: ‘These proceedings started off as a landmark case in setting the foundation for collective actions in the UK and it will end being as equally ground breaking in a settlement achieved under heavy attack and challenge by the litigation funder. It is most unfortunate that Innsworth chose to fight the settlement and to also threaten Mr Merricks personally by starting litigation against him. Its efforts have today failed and hopefully they accept that and move on.’
Freshfields acted for Mastercard, with London and Dublin managing partner Mark Sansom leading the team. A spokesperson from the firm said: ‘We are delighted for Mastercard that the Tribunal has approved the settlement amount of £200m, vindicating Mastercard’s position that the amount of the settlement was just and reasonable.’
The tribunal will deliver its full judgment at a later date, expected in mid-March.
