Merricks v Mastercard: The Competition Appeals Tribunal hands down landmark collective proceedings order in claim worth £14bn

Merricks v Mastercard: The Competition Appeals Tribunal hands down landmark collective proceedings order in claim worth £14bn

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In a decision handed down in August in the case of Merricks v Mastercard Incorporated and others [2021] CAT 28, the Competition Appeals Tribunal made a Collective Proceedings Order (CPO) for the first time. In addition to being a landmark development in group litigation in the UK, the decision contains litigation funding aspects that will be of interest to prospective litigants defending and bringing claims where third party funders are involved.


CPOs are a creation of the Consumer Rights Act 2015. They are distinct from Group Litigation Orders, the other means by which group litigation can be conducted in this jurisdiction, in a number of ways, perhaps most significantly:

  • CPOs allow proceedings to be brought on an “opt out” as opposed to an “opt in” basis.
  • They allow the Tribunal to award damages calculated on an aggregate basis. In practical terms, the granting of the CPO in this case has allowed Mr Merricks to bring a claim on behalf of a class of over 45m people seeking to recover sums totalling approximately £14bn.

To put the size of the class in context, it effectively comprises every adult who purchased goods in the UK and was over 16 years old between 1992 and 2008. As to the quantum sought, this was described in the judgment as “enormous”.

The CPO granted in this case is the culmination of protracted litigation which saw the application initially refused by the tribunal on the grounds that the claims themselves did not meet the applicable eligibility criteria. Mr Merricks successfully appealed to the Court of Appeal, which held that the tribunal did not apply the eligibility conditions correctly. Mastercard’s appeal to the Supreme Court was dismissed and the case remitted to the tribunal to determine the CPO application.

Mastercard successfully resisted applications by Mr Merricks to widen the class to include adults who had died before the claim form was issued and to include a claim for compound interest. It also raised a significant issue regarding the funding of the litigation, which was examined by the tribunal in the course of considering the funding of the proceedings generally.

Funding the proceedings

The tribunal is obliged under the applicable legislation and The Competition Appeal Tribunal Rules to consider whether an applicant for a CPO can act as a class representative on behalf of the proposed class. The class representative must have sufficient means to fund the litigation and be free from conflicts of interest that might prevent them acting in the best interest of the class. The tribunal also needs to consider whether the proposed class representative will be able to pay any adverse costs order that might be made. The presence of suitable litigation funding is accordingly a critical part of the tribunal’s decision on whether to grant a CPO. In this case, Mr Merricks had changed his funding arrangements since the application was initially issued in 2017, with the effect that the funding of the litigation had to be re-examined by the tribunal.

The tribunal began with the relatively straightforward matter of considering the adequacy of the level of funding. Cover for adverse costs was in the sum of £15m and for the claimant’s own costs, slightly over £45m. The tribunal deemed these sums sufficient.

The issue of conflicts was more complicated. Where it is proposed that funding is provided by a commercial funder, the tribunal is obliged to ensure that the proceedings can be conducted in the best interest of each class member, and their interests should outweigh the interest of the funder. Settlement and termination were seen by the tribunal as the parts of the funding agreement most likely to lead to conflict.

As to the issue of settlement, the funding agreement gave Mr Merricks the final say on whether to accept or reject a settlement offer, and the tribunal considered that sufficient to protect the best interest of the class. As to the matter of termination, the tribunal was concerned that the funder’s discretion was too broad, and noted that the funder was not obliged to take independent advice in respect of any decision to terminate. Any decision on the part of the funder to terminate the agreement would leave the proposed representative without funding. To assuage the tribunal’s concerns, Mr Merricks was obliged to obtain an amendment to the funding agreement to the effect that the funder was obliged to take independent legal advice before taking a view on termination.

The issue of concern to Mastercard, however, was that of enforceability. Mastercard has no right to enforce the litigation funding agreement because it is not party to it, and the rights of third parties to enforce the agreement are specifically excluded. Given that the funder was domiciled in Jersey, a third party costs order in Mastercard’s favour would be of limited use. Mr Merricks had a distinguished career, which included a stint as the Chief Financial Services Ombudsman, but he was clearly not in a position personally to satisfy an adverse costs order in multi-billion-pound litigation. The court was sympathetic to this issue, which was in the event resolved by the litigation funder agreeing to provide an undertaking to discharge any liability for costs on the part of Mr Merricks. 


It has taken over six years for the tribunal to issue its first CPO, and it has done so in a high profile and high value piece of litigation. Companies who deal with consumers should take note of the tribunal’s powers and the potential cost of being a defendant to a CPO to their business.

For those with an interest in litigation funding, this judgment serves as a useful reminder of the elements of litigation funding agreements that should cause them most concern:

  • Whether the level of funding is sufficient;
  • The extent to which they will be able to make decisions regarding settlement;
  • The circumstances in which the funder can terminate the agreement; and 
  • For defendants, the extent to which the funder can be compelled to meet an adverse costs order against a litigant of limited means


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