Class representative Walter Merricks has settled his dispute with Innsworth Capital over fees arising from the long-running Mastercard class action.
Merricks, former Financial Ombudsman Service chief ombudsman, revealed yesterday (6 August) that Innsworth had settled an arbitration claim brought against him, while separately, the Competition Appeal Tribunal (CAT) had made an order paying Innsworth £62.5m for backing the claim, plus interest that had accrued since the case was settled in December 2024.
The settlement will allow Merricks, who represented the class, to distribute £100m to UK residents on an opt-out basis later this year.
The Mastercard litigation was the first opt-out claim under the Consumer Rights Act to be certified by the CAT. The ruling concerned proceedings brought on behalf of consumers in the long-running Mastercard litigation, which alleged losses arising from unlawful multilateral interchange fees, with initial damages estimated at £14bn.
After more than eight years, Merricks and Mastercard agreed a £200m settlement. The CAT approved that agreement, finding that the prospects of obtaining a judgment significantly above that sum were low.
Innsworth, which had invested £46m in the claim, had sought £179m from the settlement and instructed Akin Gump and Charles Béar KC of Fountain Court Chambers to challenge the CAT's decision on distribution.
However, in June the Divisional Court dismissed the subsequent judicial review, finding in favour of Merricks and the residual beneficiary, the Access to Justice Foundation.
Lord Justice Males found: “The CAT determined that despite the very poor outcome of the claim against Mastercard, a just and reasonable return for the claimant funder would be reimbursement of its expenditure of between £41m and £46m, together with a profit of 50% of that expenditure.”
The funder initiated a confidential London arbitration against Merricks on the basis he had not used his best endeavours in pursuing the claim, an allegation he robustly rejected.
Innsworth later confirmed that the claim, which was defended by Merricks’ long-standing legal advisers, Willkie Farr & Gallagher, and Tony Singla KC of Brick Court Chambers, had been discontinued “as part of the resolution of all issues”.
Merricks said: “I am delighted to report that I have resolved all differences with my funder. As a result, the arbitration proceedings that were pursued against me have been discontinued by Innsworth.
“As the tribunal’s decision on the settlement and its distribution is no longer challenged, the tribunal has made an order allowing Innsworth to be paid the sums which the tribunal determined it is entitled to receive, with my having indicated support for the tribunal to make such an order. Accordingly, a sum of just over £63m has been paid to my funder from the £200m settlement I achieved with Mastercard.“
He added: “After almost 10 years of litigating first with Mastercard and then with Innsworth to get compensation for British consumers, this finally opens the way for me to prepare for distribution of at least £100m to consumers. This is presently the largest amount ever secured from group litigation for the benefit of UK consumers.”
Merricks explained that people now over the age of 34, who shopped in supermarkets between May 1992 and June 2008, will be eligible to claim, regardless of whether they ever had a Mastercard card.
The class representative confirmed a nationwide campaign would alert people to the opening of a six-month claim registration period, after which the £100m will be split equally among claimants, who are expected to receive at least £45, possibly up to £70.
The payments are expected to be made in early 2027 either by direct bank transfer or gift vouchers. Merricks said he was exploring “giving consumers the option to donate the money they are set to receive to one of a small number of national charities".
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