Collective redress claims are an established feature of the civil litigation landscape. The commonest mechanisms are representative claims and group litigation orders (GLOs). By definition they involve a number of claims so are not small or low value, but there is a wide range from GLOs involving a few hundred individuals to behemoths like the NOx emissions cases, which involved 13 separate GLOs of which four were selected as lead GLOs.
Even a small GLO will involve proactive case management and regular contact between the parties: large GLOs involve multiple applications and costs and case management conferences (CCMCs), including CCMCs built into the trial timetable. Woe betide the solicitors who cannot keep all the juggling balls in the air, as the rugby head injuries litigation has recently shown.
Costs pressures
Judges are increasingly keen to manage costs. Collective claims are often proactively managed anyway – see for example the case management powers for GLOs in CPR 19.24 – so it is easy to include costs management as part of that. Increasingly they will grasp the costs nettle, partly due to recent cases where costs have ballooned.
Amongst the more notorious examples is the NOx emissions litigation where the claimants’ solicitors spent £3.65million just on costs budgeting – the defendants’ spend was not disclosed but given there were 18 defence counsel at the CCMC, they were presumably quite high too. In that case the court made swingeing cuts. The claimants estimated £207,748,907.15 in future costs: the court allowed just £51,977,713.75, if the term “just” can be used of a £52million costs bill.
Litigation funders
The procedural tussle with defendants is complicated enough, but the costs pressure can introduce danger to the rear for claimants in the form of litigation funders. At the heart of collective redress claims there is a tension. These claims are often motivated by the desire for justice for the “little man” and to hold to account the world’s corporate behemoths. It is easy to be cynical about that since claimant lawyers are presumably well-paid, but often the claimants have suffered significant, irreparable harm – see for example the baby talc litigation where group claimants have either mesothelioma or ovarian cancer.
However, collective claims are rarely possible without third party funding. That means borrowing from banks and litigation funders who are usually profit-driven commercial entities for whom a collective claim is a high-risk but potentially lucrative investment. Take, for example, Innsworth, who financed the Mastercard litigation (on which more below) and are now funding a £1.5billion competition claim against Rightmove. They fund claims with a minimum claim value of £100million. According to its website, Innsworth is owned and funded by Elliott Investment Management LLP, a Florida based fund manager with $80.3billion in assets under management: not obvious champions of the oppressed masses. Group litigation makes for strange bedfellows.
Strange bedfellows can then make for a tense relationship. Funders are keen to secure their share of any award and maximise profits. The same financial considerations that make the claim worth bringing can make a challenge by a funder worth a roll of the dice. As one decision and one ongoing claim show, the result can be satellite litigation.
The Mastercard litigation
The Mastercard litigation was a follow-on claim by consumers for damages relating to fees charged on credit and debit card transactions – group claims by various businesses are ongoing. Being a competition matter, it was heard by the Competition Appeal Tribunal (CAT). The CAT is currently the only domestic jurisdiction which allows opt-out group claims, and so there were 44 million group members (in effect any UK resident aged over 16 at any time between 1992 and 2008). The claim was said to be worth £14billion plus interest but was very difficult to prove a loss.
In 2024 the claimants agreed a settlement of £200million – around 1.4% of the sum claimed. The CAT had to approve the settlement and, unusually, determine how it would be divided. It ring-fenced £100million for the class, with a maximum £70 payment per claimant. It also ring-fenced Innsworth’s expenditure of about £46million and then awarded it a profit of 50%, giving it a total of £68.2million. The balance was for the class with any surplus going to the Access to Justice foundation.
Innsworth launched two challenges. The first was arbitration proceedings against the lead claimant (Walter Merrick) about the £200million settlement, which it thought too low. The second was a judicial review of the CAT’s approach to dividing the proceeds. Innsworth argued that the correct approach was to split the £200million equally between the class and Innsworth would recover its fees from the unclaimed sums. It sought up to £179million based on its funding agreement, which entitled it to recover three times the sum it agreed to fund (nearly £60million). Any unclaimed sums beyond £179million would go to charity.
Behind the funder’s apparent magnanimity was a shrewd calculation: an equal share for every class member equated to about £4.50 per person so most would not bother to claim. As a result, Innsworth would likely recover closer to £179million than under the CAT’s approach.
Judicial reviews carry a high threshold so it was no surprise that they lost in the High Court in June 2026. That was despite demonstrating that part of the CAT’s reasoning – based on its interpretation of Australian cases – was suspect. Innsworth was limited to a 50% profit, a figure significantly below what they hoped or perhaps expected.
It was then reported in August 2026 that Innsworth had settled the arbitration proceedings for £62.6million plus interest to totally conclude matters. Crucially, the sums involved made the double challenge worth a gamble for the funder. The decision also highlights that part of the funders’ calculation is the fact that they have limited control. If funders support a single claim they often buy the cause of action, which gives them control or a significant degree of it. With a group action there is less influence, which can lead to results that the funders dislike: that is a risk funders presumably expect to be reflected in their profit.
The Brazilian dam litigation
An ongoing claim relating to the Mariana Dam litigation shows that even where the funder has agreements in place, there can still be disputes. In late 2025, over 600,000 claimants succeeded in their claim against BHP group and others for damages relating to a dam collapse, arguably Brazil’s worst ever environmental disaster.
In January 2026, the court awarded the claimants an interim payment on account of costs of £43million. For context, the claimants’ relevant costs were put at £189million and there had been no costs budgeting. There is now a dispute about how that should be applied. The claim is brought by the security agent against the claimants’ solicitors, Pogust Goodhead. The security agent alleges that the sum is subject to an equitable charge in the lenders’ favour and that Pogust Goodhead are obliged to repay various loans plus interest and success fees.
This litigation is at an early stage, and Pogust Goodhead have yet to file a defence (or it is not publicly available – these comments are solely based on the security agent’s particulars of claim). The particulars show the complexity of funding arrangements and the consequent risk to both funders and solicitors. Pogust Goodhead are guarantors of the loans and have charged assets relating to the litigation for the benefit of the lenders. It is alleged that, despite the loan agreements, they have agreed with ATE insurers that the interim payment on account of costs is to be held on trust for them. Other breaches of the loan agreements are alleged.
As a result, the lenders are allegedly entitled to over £84million with daily interest of £67,075.64, plus costs on the indemnity basis, put at £575,000 and counting. They include costs of a previously compromised application for an urgent injunction. In other words, Pogust Goodhead are alleged to owe the security agent significantly more than the interim payment awarded by the court.
Conclusion
Collective claims are multiplying, and if opt-out claims spread from the CAT to other courts they will become even more popular – there are certainly groups arguing that should happen. The larger the claim the more attractive they are for funders, but equally that increases the complexity of the financing involved, and the risks to funders, claimants’ solicitors and claimants. That is likely to lead to more satellite litigation in due course, though given that claims on this scale are a relatively new phenomenon, these disputes may eventually reduce as the market becomes more established. For defendants, a realistic but firm approach to costs budgeting is advisable. A restricted budget is unlikely to defeat such a claim, but it can increase the pressure on the claimants’ solicitors alongside the usual benefits that costs budgeting can bring.
See our litigation case review for more court decisions that may be of interest.
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