The High Court’s rejection of litigation funder Innsworth Capital’s attempt to secure a larger share of the Mastercard settlement is about more than one funding dispute. It offers a revealing glimpse into the realities of Britain’s class action regime.

After more than a decade of litigation, a claim once valued at £14 billion concluded with a £200 million settlement. What followed was not a debate about compensation for consumers, but a court battle over how much of the proceeds should go to the funder.

That fact alone should give policymakers pause.

The Reality Behind the Headlines

The Mastercard case was presented as a landmark opportunity to deliver compensation to millions of UK consumers. Yet the final settlement amounts to only a few pounds per potential claimant.

Meanwhile, the proceedings generated years of legal activity, tens of millions of pounds in costs and a subsequent dispute over investor returns.

Innsworth argued that the Competition Appeal Tribunal had unfairly reduced the profit it was entitled to receive. The High Court disagreed, backing the tribunal’s decision that a larger return would have been excessive in the circumstances.

An Industry Dependent on Investor Returns

The funder’s response was telling. Innsworth warned that if investors cannot achieve sufficient returns, capital will be redirected elsewhere and fewer collective actions will be funded.

That may be true. But it also highlights the extent to which the system relies on attracting financial investors rather than empowering consumers.

Supporters argue that litigation funding expands access to justice. Critics see a model that increasingly resembles an asset class, with claims treated as investment opportunities and legal outcomes judged by the returns they generate.

The Mastercard dispute illustrates that tension perfectly.

A Useful Reminder for Policymakers

The courts were right to prioritise the interests of class members over the commercial expectations of funders. Yet the wider lesson is that collective proceedings often produce outcomes far removed from the headline figures used to justify them.

Years of litigation, enormous legal costs and a settlement worth a fraction of the original claim are unlikely to strengthen public confidence in the system.

As ministers continue to consider the future of collective actions and litigation funding, the Mastercard case should serve as a reminder that bigger claims do not necessarily produce better outcomes. Sometimes they simply create larger and more complex disputes over who gets paid at the end.