Appropriate charitable recipient of undistributed settlement monies

20/05/25

Merricks v. Mastercard [2025] CAT 28

The Competition Appeal Tribunal has handed down its judgment on the application for approval of the settlement of the long-running collective proceedings brought by Mr Walter Merricks against Mastercard concerning multilateral interchange fees, an application which was opposed by the litigation’s funder Innsworth. The proceedings concern a class estimated to number around 44 million people. The aggregate damages estimate in the original claim form dated September 2016 was around £14 billion. The application sought approval of a settlement in the sum of £200 million.

The Access to Justice Foundation was given permission to intervene by written submissions on the subject of the appropriate charitable recipient of undistributed settlement monies. The Foundation is a grant-making charity established in 2008 in response to widely held concerns about difficulties many people have in accessing legal advice and the lack of available funding for this. It is the prescribed charity to distribute pro bono costs awards made pursuant to section 194 of the Legal Services Act 2007, and also the default recipient of undistributed damages in opt-out collective proceedings under section 47C(5) of the Competition Act 1998.

In approving the collective settlement, the Tribunal had to consider among other things the appropriate charitable recipient of any remaining funds following distribution of the settlement. Mr Merricks proposed the Access to Justice Foundation, whereas Mastercard proposed a different charity.

The Tribunal held: “in our judgment the Foundation is the appropriate charity to receive the residue of money out of the Settlement Sum. The Foundation is the only charity prescribed under CA s. 47C(5) to receive unclaimed damages in the event of a judgment. The class in the present proceedings comprises almost the entire adult population of the UK over a certain age. Since the justification of the collective proceedings is that the CMs could not in practice bring these claims otherwise, a charity which has as its object the provision of assistance to a very wide range of bodies across the UK to help the disadvantaged pursue or protect their legal rights seems to us an appropriate recipient of residue funds in these proceedings” (para. 202).

The Tribunal considered that there was “considerable force in the Government’s observation, in its response to the consultation on Private Actions in Competition Law (January 2013), which led to the introduction of the regime for collective proceedings in the Consumer Rights Act 2015, that ‘there would be frequently substantial difficulties in determining a suitable candidate for organisational distribution and that this in turn would likely lead to the lobbying of judges and potentially also satellite litigation disputing the party chosen’.” However, the Tribunal accepted that “there might sometimes be a charity which, in the circumstances or nature of particular collective proceedings, is more closely aligned with the interests of the class than the Foundation”, which would “be a matter for determination by the Tribunal when addressing settlement on the particular facts of the case”. (para. 203).