Mastercard: Publicity campaign to start soon
The bitter dispute between Walter Merricks and his litigation funder over his £200m settlement of the Mastercard collective action has finally reached a conclusion.
Innsworth has dropped the arbitration proceedings it had started against him and accepted a payout of £62.6m plus interest from the proceeds.
Mr Merricks is now preparing to distribute at least £100m to consumers, with each receiving at least £45.
In June, the Divisional Court rejected Innsworth’s challenge [1] to its return from the claim.
It followed the Competition Appeal Tribunal’s (CAT) decision about how last year’s £200m settlement [2] should be distributed. The claim was originally for £14bn.
The first £100m is for consumers, with any unclaimed sums going to the Access to Justice Foundation. The second tranche of money repays Innsworth the sums it has spent on the litigation.
The remaining cash pays, in order, for: the relatively small other costs and expenses of Mr Merricks for which Innsworth was not responsible; a 50% profit for Innsworth; supplementing the £100m in the event that more than 5% of the class submit claims; and then, if any is left, a donation to the foundation.
The CAT agreed Innsworth should see a “profit return” but in assessing this noted: “Although the settlement has secured a positive payment, the outcome of the present case is very far from a success for a class of some 44m claimants…
“A return on investment of 1.5 is here appropriate… recognising the significant risk but reflecting also the poor outcome.”
The arbitration was started separately on the basis of Mr Merricks failing to use his best endeavours to maximise its return.
But Ian Garrard, Innsworth’s managing director, confirmed to Legal Futures that it has been discontinued “as part of the resolution of all issues”.
Mr Merricks said: “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.
“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. Most people who are now over 34 and who shopped in supermarkets between May 1992 and June 2008 will be eligible to claim, regardless of whether they ever had a Mastercard card.”
He said that in the coming months there would be a nation-wide publicity campaign to alert people and a six-month period during which people will be able to register their claim.
The £100m will be divided equally between those who claim, and the expectation is that they will get between £45 and £70, depending on the numbers.
The payments will be made after the six-month period ends, which will be in the first half of 2027.
Mr Merricks said he was also exploring giving consumers the option to donate the money to one of a small number of national charities.