Competition Appeal Tribunal Finds Funding Agreement Based On Multiple Not A DBA, Despite Express Cap By Reference To Proceeds

The Competition Appeal Tribunal (CAT) has held that litigation funding agreements were not damages-based agreements (DBAs) where the funder's fee was based on a multiple of the funding provided, rather than a share of damages recovered as per the arrangements considered in the Supreme Court's high-profile decision in Paccar (considered in our previous blog post). They were therefore enforceable in the context of applications for both opt-in and opt-out collective proceedings orders: Commercial and Interregional Card Claims I Ltd v Mastercard Incorporated [2024] CAT 3.

The decision is similar to the CAT's previous judgment in the Sony case (considered here), which likewise found that a funding agreement based on a multiple of funding was not a DBA – even though (as in the present case) the funder's fee would ultimately be capped by reference to the amount of the proceeds recovered in the litigation, or a subset of those proceeds. However, in the present case, unlike