UK Trends and Developments Contributed by: Samantha Ward, Ben Jasper, Oliver Carroll and Bethany Downey, Clifford Chance LLP
In May 2024, the CAT approved the second collec - tive settlement under the CRA 2015 in Justin Gut- mann v First MTR South Western Trains Limited and Another [2024] CAT 32. This settlement was between the Class Representative and the second defendant, Stagecoach South Western Trains Limited (SSWT). The Class Representative claimed that SSWT, along with the other defendants, abused a dominant posi - tion by, in effect, double-charging customers for part of the service provided to them. The CAT expressed concerns about the original settlement proposal, including the feasibility for individuals of recovering damages and whether the proposals for unclaimed sums were appropriate. The parties revised the set - tlement to reflect the CAT’s concerns and this was then approved. In February 2025, the CAT gave an oral ruling approving the largest proposed settlement of a collective action so far in the collective action brought against Mas - tercard by Merricks. The claimants originally sought damages of GBP14 billion plus interest, bringing it to just under GBP20 billion claimed. The claim faced a number of hurdles along the way, with issues around limitation, causation and pass-on, ultimately narrow - ing the scope of the claim significantly. In December 2024 a settlement agreement was reached. The litiga - tion funder objected to the settlement. It argued that the settlement sum was too low and that Mr Mer- ricks should have extracted a higher sum, seeking to exert greater pressure on Mastercard to pay a higher amount. Despite this, the CAT found it to be just and reasonable. In May 2025, the Tribunal ruled on the pro - posed distribution of the GBP200 million. The Tribunal approved the proposal of Mr Merricks and Mastercard that: (i) GBP100 million would be ring-fenced for class members; (ii) GBP46 million would be ring-fenced as a minimum return to the funder (roughly equating to its actual expenditure); and (iii) a portion of the balance, depending on class take-up would go to the funder as profit, with the rest paid to charity. Despite strenuous objections from the funders, the CAT commended the plan which it found sought to achieve the maximum take-up of a reasonable sum by class members. Funding Following the Supreme Court’s judgment on 26 July 2023 in Paccar Inc and Ors v Road Haulage Asso-
ciation Limited and UK Claims Limited [2023] UKSC 28, Litigation Funding Agreements (LFAs), in which the funder’s return is a share of damages ultimate - ly awarded to the claimant, are now categorised as Damages-Based Agreements (DBAs) which are not enforceable if they do not meet the requirements set out in the applicable regulations, such as capping the share of winnings at 50% and being on a no win, no fee basis. Most LFAs have now been updated to work around this ruling, with provisions such as recovering a multiple of the funds committed being applied. In March 2024, the UK government announced the Litigation Funding Agreements (Enforceability) Bill, which sought to reverse the decision of the judgment on third-party litigation funding ( R (on the application of PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28). While this bill was ultimately not passed prior to the 2024 General Election, the Civil Justice Council 2025 review has advised that this decision should be reversed, and so we await to see if legisla - tive reform will be introduced to address this. The future of competition collective actions On 6 August 2025, the CMA launched a call for evi - dence on the future of the opt-out collective actions regime. The call for evidence notes that the CMA is committed to consumer protection and wants to ensure the regime is achieving its aims to: (i) provide improved redress mechanisms for parties harmed through anti-competitive behaviour; (ii) to provide a significant deterrent effect to future anti-competitive behaviour; and (iii) to strike the right balance between the need for an effective system for collective action claims and protecting defendants from having to set - tle unmeritorious claims. The CMA notes that it is aware of the potential bur - den on businesses that increased exposure to litiga - tion can present and that the regime has developed in unanticipated ways. For instance, since 2015, the opt-out caseload has grown significantly, with tens of billions of pounds in damages claimed and hundreds of millions of pounds spent on legal fees. This is far higher than estimated in the original impact assess - ment, which estimated the total cost to businesses to be GBP30.8 million per annum. The CMA notes the type of case being brought before the CAT has also
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