Justin Gutmann v Apple Inc & Ors

In opt-out collective proceedings, section 47C(3) of the Competition Act 1998 permits the Competition Appeal Tribunal to order that a funder’s return and lawyers’ fees are paid from an aggregate damages award before distribution to class members. The class representative may enter funding and legal agreements on the class’s behalf which contemplate such payments.

The power is subject to the Tribunal’s continuing supervisory jurisdiction. It must ensure that the payment and its priority are fair, proportionate and reasonable in the circumstances. The separate provisions governing unclaimed damages do not restrict the wider powers concerning damages that have been awarded and are to be distributed.

Apple appealed against the Competition Appeal Tribunal’s funding decision in certified opt-out collective proceedings brought by Justin Gutmann as class representative. The Tribunal had held that the litigation funding agreement could provide for the funder’s return, and litigation costs, to be paid from damages before distribution to the class.

Apple contended that the statutory collective-proceedings regime permitted a funder to be paid only from unclaimed damages. It also contended that the agreement created an impermissible conflict between the class representative’s duties to the class and the funder’s interests.

The appeal was from the Tribunal’s judgment [2024] CAT 18. The central issues were the Tribunal’s jurisdiction under section 47C of the Competition Act 1998 and whether the funding arrangements prevented the representative from acting fairly and adequately for the class.

1. Appeal dismissed. Section 47C(3)(a) and (b) of the Competition Act 1998 conferred wide and unrestricted powers. The Tribunal could order damages to be paid to the class representative, who could then pay funders and lawyers, or direct payment of a proportion to an appropriate third party. Neither limb confined the recipient to a claims administrator.

2. The representative acts on behalf of the opt-out class both in bringing the proceedings and in entering litigation funding and legal agreements. Payment under those agreements from the damages award is therefore made on behalf of the class. The absence of individual contracts between class members and the funder did not prevent the representative from binding the class, subject to the Tribunal’s supervision.

3. Sections 47C(5) and (6), which address the destination of damages left unclaimed after a specified period, dealt with a different problem. They did not restrict the Tribunal’s powers under section 47C(3), nor require funders and lawyers to bear the risk that a successful distribution leaves no unclaimed balance. The Court approved, as correct though obiter, the observation in Le Patourel that the Tribunal may ensure that funders and representatives are paid.

4. The Tribunal’s powers under the Competition Appeal Tribunal Rules 2015, including its duties to act fairly, justly and proportionately, reinforced that conclusion. The Court rejected an incoherent distinction between an award following judgment and a settlement, since the Tribunal may address costs, fees and disbursements in either context.

5. An agreement contemplating priority payment did not itself make the class representative unsuitable. Any conflict between the funder and the class remained subject to the representative’s duty to act in the class’s best interests and the Tribunal’s supervisory jurisdiction. The reasonableness and proportionality of the funder’s return were matters for scrutiny at distribution. Ground 3 consequently failed once the jurisdictional ground failed.

• Court of Appeal (Civil Division): Apple’s appeal was dismissed: [2025] EWCA Civ 459.
• Competition Appeal Tribunal: The Tribunal held that it had power to permit payment of a funder’s fee from damages awarded to the class, subject to its supervision, and certified the proceedings: [2024] CAT 18.
• Competition Appeal Tribunal: The proceedings had previously been certified subject to review of revised funding arrangements following PACCAR: [2023] CAT 67.