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UK Appeal Court Sides with Funders Against Apple, Sony, Visa, Mastercard

By  |  July 6, 2025

The UK litigation funding sector has received a significant boost following a ruling by the Court of Appeal that upholds the legality of revised litigation funding agreements (LFAs). The decision arrives in the wake of the Supreme Court’s 2023 PACCAR judgment, which previously rendered traditional percentage-based LFAs unenforceable in collective actions.

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    The case—Commercial and Interregional Card Claims Ltd v Mastercard and others—saw major corporate players including Apple, Sony, Visa, and Mastercard challenge the updated funding model. However, the Court of Appeal dismissed their appeal, according to a statement issued after the decision, affirming the validity of LFAs that base funder remuneration on a multiple of the financing provided, rather than a share of the damages awarded.

    Per a statement accompanying the judgment, this multiple-based model had earlier been approved by the Competition Appeal Tribunal (CAT) as a compliant alternative under the post-PACCAR legal framework. The Supreme Court had previously ruled that LFAs structured as a percentage of damages were effectively damages-based agreements (DBAs), which are prohibited in CAT proceedings.

    Related: EU Intensifies Scrutiny of Visa and Mastercard Fee Structures

    The judgment, authored by Sir Julian Flaux, Chancellor of the High Court, emphasized that these revised agreements remain lawful, even if capped in relation to potential damages. According to a statement from the court, the method of calculating funder returns—by reference to their financial outlay rather than recovered damages—ensures they are not classified as DBAs.

    Additionally, the court addressed concerns over clauses in some agreements that included provisions for percentage-based returns should the legal environment shift again. The Court held that such clauses do not render the agreements invalid. However, it did acknowledge, according to the judgment, that they could pose a heightened risk of conflict between funders and class representatives, a concern mitigated by existing legal safeguards.

    Legal professionals involved in the case welcomed the ruling. Dorothea Antzoulatos, director at Charles Lyndon, one of the firms representing the respondents, commented on LinkedIn that the decision offers much-needed clarity and reassurance for litigation funders operating under the revised legal landscape.

    The judgment was delivered with unusual speed, following a two-day hearing held on June 10 and 11. According to a statement from legal observers, the expedited ruling underscores the judiciary’s recognition of the pressing need for certainty in the funding arrangements underpinning large-scale collective claims.

    Source: Global Legal Post