An attempt to overturn the agreed share-out of the £200 million settlement of the historic Mastercard collective action has been thrown out by a divisional court. In Innsworth Capital v Competition Appeal Tribunal, Lord Justice Males and Mr Justice Morris heard a claim by litigation funder Innsworth that the CAT made errors of law in deciding the funder's share.
The challenge was made by judicial review because the usual route of an appeal to the Court of Appeal was not open to Innsworth, which had taken part in the CAT proceedings only as an intervener. The CAT itself took no part in the two-day hearing last month; class representative Walter Merricks CBE, the Access to Justice Foundation - which stands to benefit from unclaimed funds from the settlement - and Mastercard appeared as interested parties.
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In the background to the case, Lord Justice Males noted that Merricks' original claim against Mastercard was 'ambitious'. The compensation sought for Mastercard's unlawful charging of multilateral interchange fees was at one stage estimated at £14bn; the settlement was reached after preliminary hearings found substantial parts of the claim to be time-barred.
Innsworth, which had spent up to £46m in the case, sought £179m from the settlement. Dismissing the challenge, Males - with whom Mr Justice Morris agreed - noted that the CAT had found that a just and reasonable return would be reimbursement of Innsworth expenditure plus a profit of 50%. 'The CAT determined also, at least by necessary implication, that any greater return would have been excessive,' the judges said. 'These were conclusions which it was entitled to reach and which were well within the wide powers conferred upon it as an expert and specialist tribunal.'
Merricks described the ruling as 'a complete vindication' his position. 'It delivers a total rejection of all of Innsworth’s grounds of challenge, and they will now need to pay my costs of the judicial review. It can only be described as a total victory for me and the class I have represented over the last 10 years'.
Innsworth said it was 'disappointed' by the outcome. 'This action was undertaken with a view to securing much-needed clarity on the extent of the supervisory discretion of the CAT in the context of the opt-out class action framework.' It added that the funding 'market cannot function sustainably' in the absence of certainty as to what constitutes a fair return.
The remaining hurdle in the 10-year-old case is arbitration proceedings brought by Innsworth. Merricks said he expected this to 'come to a positive conclusion'.
Charles Béar KC and Bibek Mukherjee, instructed by Akin Gump, appeared for Innsworth; Mark Brealey KC, instructed by Willkie Farr & Gallagher, appeared for Merricks, Gerard Rothschild, instructed pro bono by Hogan Lovells, appeared pro bono for the Access to Justice Foundation and Owen Draper, instructed by Freshfields, for Mastercard.
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