Case Study: Class Actions

Funding a Multi-Million Dollar Antitrust Class Action for Consumers

How litigation funding enabled millions of consumers to pursue collective redress against a large retail bank for anti-competitive behavior.

Audley Capital Advisory Team

Class Action Specialists | Case Study Series

Expert-reviewed content

What Happened in This Class Action Funding Case?

A major retail bank's anti-competitive conduct overcharged millions of consumers. Litigation funding enabled a class action that individual claimants could never have pursued alone, covering legal costs, expert fees, and case management on a fully non-recourse basis.

A large retail bank (the Defendant) was found by a competition regulator to have engaged in anti-competitive behavior, resulting in overcharging millions of consumers over several years.

A representative Claimant was identified to bring a subsequent collective action (or class action) on behalf of all affected consumers for recovery of the losses.

What Were the Key Challenges?

Class actions are uniquely challenging:

High Cost

The sheer scale of legal and expert work (data analysis, notice requirements, settlement administration) demands tens of millions in funding.

Risk Management

The Claimant representative cannot personally absorb the risk of adverse costs for millions of class members.

How Did Litigation Funding Enable This Class Action?

A syndicate of litigation funders was engaged to provide Portfolio Funding(a basket of risk) for the entire collective proceeding.

The Funding Structure:

Capital Deployment

The funders provided a capital facility large enough to cover all legal fees, technology costs (document review), and necessary expert economic reports to calculate aggregate damages.

Governance and Ethics

Due to the consumer-facing nature, the LFA was subject to intense judicial scrutiny (a requirement in collective proceedings). This ensured the funder's interest was aligned with the class members.

Non-Recourse Protection

The non-recourse principle was firmly established, protecting class members from any financial risk.

The Outcome: Judicially Approved Settlement

The case proceeded through the certification phase and was backed by the funder's resources and strategic insight. The Defendant, realizing the financial backing behind the class, negotiated a pre-trial settlement.

Protecting the Class

The settlement amount, which ran into the hundreds of millions, was subject to judicial approval. This process involved:

The court scrutinizing the fairness and reasonableness of the settlement amount
The court reviewing the funder's return calculation to ensure it did not unfairly reduce the net recovery for class members

Judicial Approval

The court approved the settlement, confirming the funder's role was essential to achieving this outcome and delivering recovery to millions of consumers who individually would never have been able to challenge the powerful bank.

The Strategic Importance of Funding

Funding transforms consumer claims from theoretical rights into realizable assets. By pooling the risk and ensuring the upfront costs are covered, legal finance is a critical tool for access to justice in mass claims.

Millions

Consumers Represented

Hundreds of £M

Settlement Value

Risk to Class Members

To understand the financial calculations that underpin these investments, see: The Complete Guide to Litigation Funding.

Frequently Asked Questions

How does litigation funding work for class actions?

In class actions, funders typically provide capital to cover all legal fees, technology costs, expert reports, and notice requirements. Returns are subject to judicial oversight to ensure they don't unfairly reduce recovery for class members.

What is judicial oversight in funded class actions?

Courts scrutinize funded class action settlements to ensure they are fair and reasonable for class members. This includes reviewing the funder's return calculation to confirm it doesn't disproportionately reduce the net recovery available to individual claimants.

Can litigation funding help with consumer protection claims?

Yes, litigation funding is often the only mechanism that can finance the multi-million dollar costs required to bring mass consumer claims. It transforms individual claims that would be uneconomical to pursue into viable collective actions.

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