UK Competition Appeal Tribunal

FRA advised the Proposed Class Representative on funding arrangements in a successful Collective Proceedings Order Application

Competition Appeal Tribunal (CAT) cases are interesting landmarks for consideration. A recent development is the CAT’s requirement for an independent analysis of financial outcomes for parties across a spectrum of settlement or award scenarios. In the context of the noise surrounding the settlement in Merricks v Mastercard, in FRA’s opinion, this is a logical and helpful development and one which all parties to these disputes, including funders, should be alive to.  

Bulk Mail Claim Limited v International Distribution Services PLC

On 12 March 2025, the Competition Appeal Tribunal published its judgment on the Collective Proceedings Order Application in Bulk Mail Claim Limited, the Proposed Class Representative (“PCR”), against International Distribution Services Plc (formerly Royal Mail Plc). The judgment stated that “The Tribunal will need to consider how the PCR has satisfied itself that the funding arrangements reasonably serve and protect the interests of class members” [¶ 21]. While understanding the importance of funders to this type of proceedings and their need to make a rate of return, the Chair did not want a scenario where the proceedings were almost primarily for the benefit of stakeholders and not the class members.

FRA Partner Rob Mason and colleagues Derek Patterson and Jorge Lopes were instructed by Lewis Silkin, acting for the PCR, to prepare an analysis of how much of a settlement or award would be received by (a) the class members and (b) other parties including the funder under various scenarios of (i) quantum and (ii) timing of settlement or award. FRA’s analysis drew upon experience of the litigation funding sector and complex financial products modelling and waterfall arrangements and was provided to the PCR and the Tribunal. The judgment stated that:

“On 23 November 2023, the PCR entered into a Litigation Funding Agreement (the “initial LFA”) with Asertis to enable it to pay both its own costs of the Proceedings and, if ordered to do so, Royal Mail’s recoverable costs. Royal Mail set out in correspondence various features of the initial LFA which it considered were unsatisfactory. This correspondence and the decision in Riefa prompted the PCR and Asertis to enter into an “Amended LFA” on 21 February 2025, on which the PCR received independent advice from Benjamin Williams KC and Forensic Risk [Alliance] Accountants. The Tribunal carefully considered the terms of the Amended LFA and considers that they do not appear to be unreasonable, at least for certification purposes. The amounts claimed under it at any distribution stage will of course be carefully reviewed. The parties and the funder should not assume that because a particular level of return has been agreed by way of LFA, that will be the amount the Tribunal ultimately permits to come out of any settlement or judgment sums. That will depend on a number of factors, including the level of success and the sums recovered.” [¶ 33]