It has been revealed that customers in a long-running class action lawsuit against Mastercard will be entitled to just £2.27 each if all claimants come forward.
In a proposed settlement, Mastercard agreed to pay £200 million to have the class action lawsuit discontinued, but did not admit liability.
This sum is a far cry from the £14 billion payout the payments giant was facing up to 46 million eligible claimants, or around £300 each.
Litigation funder Innsworth Capital will take £45.57 million from the agreed settlement to cover costs incurred and future costs.
However, an additional £54.43 million could be paid to Innsworth in return for its funding, with the amount depending on the number of claimants who come forward.
Innsworth is entering arbitration proceedings in the potential hope of increasing its payout, The Times reports.
Class action: Claimants could be paid as little as £2.27, despite hopes payouts could reach £300 each
Most likely, a large number of the eligible millions will not file a claim. In its absence, claimants could receive higher payments.
Mastercard suggested a limit of £40, while Merricks asked for a limit of £70.
The lawsuit has been ongoing for nine years, with an initial request for £10 billion from consumer advocate Walter Merricks, who alleged that Mastercard charged unfairly high fees to UK customers in the late 1990s and early 1990s. 2000s.
The Supreme Court previously said this was “a considerable overestimation” of the payments plaintiffs could actually receive.
Seema Kennedy, chief executive of Fair Civil Justice, said: “After almost nine years of litigation – including huge costs to the British taxpayer in funding countless hearings – we now know that affected consumers can win just over £2 each in compensation, while the financier could receive a payment of £100 million.
‘This is the economics of a legal system in which lawyers and funders take precedence over British businesses and consumers.
“This statement shows why reform is so necessary, and we will continue to call on the Government to introduce measures to improve the transparency and accountability of the finance sector.”
In December, Innsworth said a proposed £200m deal would be “too low and premature”, while Boris Bronfentrinker, the lawyer representing Merricks, said the deal was a “very good outcome for UK consumers”. .
Concerns have been raised about the viability of class litigation in the UK, with Bronfentrinker warning that funders seek to “improve their financial position above all other considerations”, adding that Innsworth’s claims that the deal was rushed were ” unfortunate but not surprising.
The settlement request will be discussed at a Competition Appeal Tribunal hearing.
The case is the first of its kind to come before the UK Supreme Court, having initially been dismissed by the Competition Appeal Tribunal in 2017.
Eligible claimants must have been UK residents aged 18 years or over on 6 September 2016.
They must also have lived in England, Wales or Northern Ireland between June 1997 and June 2008, or in Scotland between 1992 and 2010, and have paid for goods with a Mastercard credit card during this time.