Google: Settlement towards the upper limit of its valuation of claim
The Competition Appeal Tribunal (CAT) has approved [1] the £260m settlement of a claim against Google that will see the class representative’s lawyers paid £12m, 32% less than they are due.
They may yet receive more if the £160m set aside to class members is not all claimed, but that would be a matter for the CAT to decide at the time.
Class representative (CR) Professor Barry Rodger, a competition law academic, alleged that Google used a variety of technical and contractual restrictions to ensure its Play Store was the only place where UK app developers could market or sell apps designed for Android devices.
The range of potential damages, according to the various experts, ranged from nothing to nearly £1.5bn. The maximum that Google said the claim was worth was £191m. Under the settlement, the smallest payout will be £200 to developers with revenue of less than £7,500.
The litigation budget was £27.7m, most of which has already been spent and covered by third-party funder Bench Walk Advisors. As well as recouping this capital outlay, Bench Walk will receive a further £56.2m as its profit, reduced from its entitlement to £82.8m under the terms of the litigation funding agreement.
The after-the-event insurer has agreed a reduction in the £6m premium to £4.1m, while solicitors Geradin Partners and the counsel team led by Robert O’Donoghue KC will share the remaining £12m, having agreed to accept 32% less than they are due.
The CAT said a settlement well below the value of the claim as put by the CR was “just and reasonable, once the downside risks for the CR in proceeding to trial are also taken into account”.
Even if the case on liability was taken to be strong, there were “very material risks and uncertainties in relation to quantum which justify regarding the headline settlement sum as just and reasonable”, it went on.
“In light of these uncertainties, it is not difficult to envisage scenarios in which the CR could do appreciably worse following a trial than the headline settlement sum, even if there are also scenarios in which he could do significantly better. Further, the proposed settlement brings immediate certainty.”
The CAT also approved the £100m set aside for the funding and legal costs. “Collective proceedings such as these could not be raised and pursued if funders were not willing to support them financially, and if lawyers were not prepared to put in time and work.
“Funders are entitled to a reasonable return which reflects the significant risk which they bear. Lawyers are entitled to reasonable remuneration and, where they have been prepared to defer or discount their fees, may legitimately insist on an uplift in the event of success.”
Professor Rodger “appears to have taken a firm approach” towards the funder, insurer and lawyers, requiring them to accept a substantial reduction on what they were due, “with no guarantee that the tribunal will accept his proposal that any undistributed funds should be applied towards those entitlements”.
The CAT said it would decide on the distribution of any money not claimed by the class once the amount was known. Other potential claimants included class members, the defendant and potentially the Access to Justice Foundation, which is the nominated recipient of unclaimed awards.