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The long-running legal dispute between Mastercard and former financial ombudsman Walter Merricks has reached a settlement, with the credit card giant agreeing to pay £200 million to resolve claims over alleged unfair merchant fees.
London-based litigation funding company Innsworth Advisors, which backed Merricks’s nine-year class action claim, stands to receive up to half of the settlement amount. The agreement marks a significant reduction from the initial claim of £10-14 billion, which aimed to compensate approximately 46 million UK consumers.
The European Commission had previously ruled that Mastercard imposed unlawful fees on transactions processed through its network between 1992 and 2008. Under the settlement terms, £100 million will be distributed equally among qualifying claimants who can demonstrate they meet specific criteria.
The settlement structure allocates £45.57 million to the litigation funder, resulting in individual consumer payments of approximately £7. The remaining £54.43 million could be distributed between the funder and consumers, subject to final determinations.
Innsworth Advisors has initiated arbitral proceedings against Merricks, potentially seeking a larger portion of the settlement. The funding company previously expressed concerns about the deal, stating it was “struck without our agreement” and raising “serious questions” about its terms.
To qualify for compensation, claimants must be over 18 and have been UK residents on September 6, 2016. Additional residency requirements apply for different regions, with specific timeframes for England, Wales, Northern Ireland, and Scotland. The settlement awaits approval from the competition appeal tribunal, with a hearing scheduled for February 19.
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