By Sam Tobin
LONDON (Reuters) – Mastercard’s agreement to settle a landmark lawsuit brought on behalf of British consumers drew criticism on Wednesday, in a dispute that could deter funders from involvement in Britain’s burgeoning class action sector.
The global payments processor in December announced an agreement to settle long-running litigation over card fees for 200 million pounds, far below the 10 billion-pound ($12.6 billion) valuation previously put on the lawsuit.
This means that, in the unlikely event that every member of the 44 million-strong claimant class sought payment, they would receive roughly 2.27 pounds each.
The deal is being opposed by funder Innsworth Capital that stands to receive half of the settlement sum, with the other 100 million pounds going to consumers.
The Competition Appeal Tribunal in London must now rule on the first contested settlement in the short history of Britain’s class action-style regime.
Uncertainty was already hanging over the sector after a 2023 Supreme Court ruling rendered many funding agreements void.
In another test for funders, the Court of Appeal is due to consider the lawfulness of agreements to fund cases against Apple and Sony later this year.
Innsworth says it spent more than 45 million pounds funding the litigation against Mastercard and that the deal, under which it will receive its costs plus 55 million pounds, is “clearly unfair”.
But consumer champion Walter Merricks, who led the case, and Mastercard say economic analysts value the claim at below 200 million pounds, after adverse rulings knocked out the vast majority of the lawsuit.
(Reporting by Sam Tobin; editing by Barbara Lewis)
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