Innsworth Capital Limited, R (on the application of) v The Competition Appeal Tribunal & Ors

A specialist tribunal exercising statutory supervision over collective settlements has a wide evaluative judgment in deciding whether distribution arrangements are just and reasonable. An appellate or reviewing court should intervene only where an identifiable and material flaw undermines the cogency of the tribunal’s conclusion, such as a gap in logic, inconsistency, or failure to consider a material factor. The tribunal is not required to adopt a rigid sequence beginning with net settlement proceeds or reimbursement of the funder’s expenditure. It may assess the overall package, including the outcome for the class, the risks undertaken, the importance of funding, and whether the funder’s return is excessive. A mistaken understanding of one supporting authority will not justify relief where it did not materially affect the outcome.

The claimant funded opt-out collective proceedings brought against Mastercard by Walter Merricks as class representative. The Competition Appeal Tribunal approved a £200 million settlement and ordered distribution through three pots: £100 million for class members, reimbursement of the funder’s expenditure, and a profit calculated at 50% of that expenditure, with any residue available for further class payments or the Access to Justice Foundation.

The claimant sought judicial review of the distribution order. Permission was granted on grounds concerning the CAT’s understanding of Australian funding authorities, its treatment of net proceeds, and a payment made in connection with the former funder Colfax. Permission was renewed at the hearing on grounds concerning market value and charitable distribution.

The central issues were the scope of review of the CAT’s evaluative judgment and whether the CAT had made material errors of law.

1. Outcome. The renewed applications for permission on grounds 2(c) and 2(e) were refused. The claim for judicial review on grounds 1, 2(a) and 4 was dismissed.
2. Review standard. Under Competition Act 1998, section 49A and Rule 94 of the Tribunal Rules, the CAT had to approve distribution arrangements only if they were just and reasonable. It was exercising a wide evaluative judgment as an expert specialist tribunal. Intervention required an identifiable and material flaw undermining the cogency of its conclusion, such as a gap in logic, inconsistency, or failure to consider a material factor. Judicial review should not give a non-party a wider route of challenge than an appeal on a point of law.
3. Australian authorities. The CAT had misunderstood the inconsistent use of ROI in Street v State of Western Australia [2024] FCA 1368 and Allen & Anor v GB Education Ltd (No 4) [2024] VSC 487. That error was immaterial. The CAT had relied on several factors, especially the very poor result for the class, the need for collective proceedings to benefit class members rather than primarily lawyers and funders, and the need to avoid an excessive recovery. The CAT’s conclusion that a 50% profit on expenditure was just and reasonable remained cogent.
4. Net proceeds. The CAT was not required to begin with net proceeds, reimburse expenditure, and then divide the balance. Its wide powers permitted it to determine the overall allocation. It had plainly considered the expenditure and the approximate net proceeds.
5. Colfax. The CAT was entitled to treat the claimant’s contractual liability to Colfax as an agreed sharing of the claimant’s profit. Holding the claimant to that arrangement was neither irrational nor unlawful.
6. Market value and charity. The CAT had considered, but was entitled to reject, unjust-enrichment and market-value arguments. Its allocation to the Foundation did not depress the claimant’s award; the residue was payable only after the claimant’s ring-fenced return and other class-related contingencies.

The claim was a first-instance judicial review of the Competition Appeal Tribunal’s distribution order in [2025] CAT 28. The CAT’s earlier settlement approval was not challenged.