A US investment manager has emerged as the backer of the revived Mastercard consumer claim. Innsworth Litigation Funding, which is owned and funded by New York based Elliott Management Corp, will fully finance the £14bn claim, it announced today.
The case has been brought by former financial services ombudsman Walter Merricks CBE on behalf of consumers alleged to be victims of ‘illegal card fees’.
The damages claim is the biggest claim in UK legal history and the first to be brought under the collective action regime introduced by the Consumer Rights Act 2015.
In 2016, Merricks brought proceedings against Mastercard seeking £14bn in damages on behalf of 46 million UK consumers for alleged losses caused by excess interchange fees.
The claim was thrown out by the Competition Appeal Tribunal (CAT) in July 2017. However, in April of this year the Court of Appeal revived the claim, setting aside the refusal to permit collective action.
The Court of Appeal found that the distribution of damages is a matter for a trial judge to consider following the making of an aggregate award, contrary to the findings of the CAT. It concluded, therefore, that it was both premature and wrong for the CAT to have refused certification by reference to the proposed method of distribution.
Mastercard has since applied to the Supreme Court for permission to appeal against the decision.
Ian Garrard, managing director of Innsworth Advisors, which advises the litigation funder, said: ‘The development of a class action regime in the UK provides Innsworth with an opportunity to grow its investments in litigation, on high value and large scale cases such as this where its resources can best be put to work.’
The mammoth competition claim was initially financed by litigation funder Gerchen Keller Capital, now owned by Burford Capital. However, Innsworth has been funding the case since Merricks appealed the CAT’s decision.
Innsworth refused to say what share of the damages it will receive if the litigation is successful.