CASE STUDY: £200M MASTERCARD SETTLEMENT

CASE STUDY: £200M MASTERCARD SETTLEMENT - What Aspiring Solicitors Should Know

What Is Happening?

“The largest consumer settlement through the English Courts” - that’s the landmark decision the Competition Appeal Tribunal (CAT) handed down on May 20, 2025, in the Merricks v Mastercard collective action. It’s a significant moment in the UK litigation and offers insight into how commercial law, disputes, and funding intersect.

WHY THIS DEAL MATTERS

• Historic Precedent: It concludes nearly a decade of litigation over interchange fees (the fees Mastercard charged retailers that were passed onto consumers).

• Consumer Impact: Over 44 million UK consumers are eligible for compensation, showcasing the power of opt-out class actions.

• Funding Controversy: The case shines a light on the tensions between litigation funders and claimants in collective actions — a growing legal and ethical issue.

• Charitable Angle: Unclaimed funds may be donated to the Access to Justice Foundation, reinforcing the wider social justice implications of legal settlements.

THE KEY PLAYERS

• Claimant: Walter Merricks CBE, former Financial Ombudsman, who led the class action.

• Defendant: Mastercard, the global payments giant.

• Funder: Innsoworth Capital, a litigation funder backing the claim, later in dispute with Merricks.

• Tribunal: Competition Appeal Tribunal, a specialist UK court handling competition law disputes.

LAW FIRMS INVOLVED

• Willkie Farr & Gallagher - Represented Merricks

• Freshfields - Represented Mastercard

• Akin Gump Strauss Hauer & Feld - Represented Innsworth Capital

• Brick Court Chambers - Represented the Access to Justice Foundation (pro bono)

PRACTICE AREAS IN ACTION

This case is a textbook example of how different practice areas collaborate on high-stakes litigation:

LEGAL AND COMMERCIAL ISSUES

• Opt-Out Collective Actions: Still rare in the UK, this case pushed the boundaries of what’s possible

• Litigation Funding: The funder’s dispute with the Claimant raises regulatory questions about fairness and oversight.

• Settlement Approval: The CAT had to assess whether the £200m settlement was “just and reasonable” versus the original £16bn claim.

• Unclaimed Funds: Legal rules govern how these are redistributed, adding another layer of complexity.

TRAINEES TAKEAWAYS - WHAT DO TRAINEES ON A CASE LIKE THIS?

Aspiring solicitors should look out for opportunities to:

• Research case law and legal frameworks for class actions and competition breaches.

• Assist in disclosure and evidence organisation, especially when the case spans years.

• Draft witness statements, memos, or internal notes summarising tribunal rulings and client strategy.

• Help with settlement structuring - ensuring compliance with tribunal rules and fair outcomes.

• Support the counsel team during hearings - from logistics to live case note-taking.

Pro-tip: Understanding how different legal areas intersect - especially in multi-party cross-sector disputes - is key to thriving in commercial law.

Legal Lingo

Opt-out Collective Action

An opt-out collective action is a type of legal claim where a representative brings a case on behalf of a defined group of people (the class), and everyone in that group is automatically included unless they actively opt out.

This mechanism was introduced in the UK by the Consumer Rights Act 2015, and it makes it easier for large groups of consumers to seek redress in cases of widespread harm, especially where individual claims would be too small to justify the cost of litigation.

Compared with:

An opt-in collective action, where individuals must actively join the claim to be represented.

AND MORE…

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Thank you for reading 😄