Jurisdiction(s):
United Kingdom

Competition Appeal Tribunal: funding fee multiples not DBAs despite proceeds cap; substance-over-form approach in Mastercard collective proceedings post-PACCAR

Published on: 23 January 2024

Published by a LexisNexis Dispute Resolution expert

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Article summary

Commercial and Interregional Card Claims I Ltd v Mastercard Incorporated [2024] CAT 3

The Competition Appeal Tribunal (CAT) concluded that litigation funding arrangements are not damages‑based agreements (DBAs) where the funder’s remuneration is calculated as a multiple of the finance advanced, rather than as a share of any damages recovered, reflecting a different model from that considered by the Supreme Court in PACCAR. On that basis, such funding terms were held to be enforceable for applications seeking both opt‑in and opt‑out collective proceedings orders in the case referenced above. The CAT’s reasoning mirrors its earlier ruling in the Sony matter (Alex Neill Class Representative Ltd v Sony Interactive Entertainment Europe Ltd and another company [2023] CAT 73), which likewise determined that a multiple‑based return does not amount to a DBA— even if, as in the present case, the funder’s entitlement is ultimately capped by reference to the proceeds realised in the litigation, or a subset of those proceeds. Unlike in Sony, in the present case the parties went further and set an express, proceeds‑linked cap on the funder’s fee, while still basing the primary calculation on a multiple of the funding advanced...

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