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The McLaren case – A Step Forward, or a Step Backward for the UK Class Action?

The McLaren case – A Step Forward, or a Step Backward for the UK Class Action?

The following article was contributed by Mikolaj Burzec, a litigation finance advisor and broker. He is also a content writer for Sentry Funding. The Competition Appeal Tribunal, London’s specialist competition court, has confirmed that a special purpose company led by Mark McLaren, formerly of The Consumers’ Association, will act as the Class Representation. McLaren represents millions of motorists and businesses who bought or leased a new car between October 2006 and September 2015 against five shipping companies that imported cars into Europe. The European Commission has already found that the car carriers fixed prices, manipulated bids, and divided the market for roll-on roll-off transport by sea. According to the Commission, the carriers had agreed to maintain the status quo in the market and to respect each other’s ongoing business on certain routes, or with certain customers by offering artificially high prices or not bidding at all in tenders for vehicle manufacturers. The class action follows the EC decision. It is one of the first actions of its kind in the UK and damages for car buyers are estimated at around £150 million. The class representative Mark McLaren has set up a non-for-profit company – Mark McLaren Class Representative Limited – specifically to bring this claim. Mark is the sole director and only member of the company and therefore has full control over it. In a collective action, the class representative is responsible for conducting the action on behalf of the class. His duties include:
  • instructing specialist lawyers and experts
  • deciding whether to proceed with the claim and, in particular, deciding whether to refer an offer of settlement to the Competition Appeal Tribunal for approval
  • communicating with the class and issuing formal notices to class members by various means, including posting notices on this website.
An independent advisory committee will be appointed to assist in the decision-making process. The claim From 2006 to 2012, five major shipping companies were involved in a cartel that affected prices for the sea transport of new motor vehicles, including cars and vans. During the period of the cartel, the shipping companies exchanged confidential information, manipulated tenders and prices, and reduced overall capacity in the market for the carriage of cars and vans. The cartel resulted in car manufacturers paying too much to transport new vehicles from their factories around the world to the UK and Europe. Customers who bought a new car or van between 18 October 2006 and 6 September 2015 probably also paid too much for the delivery. This is because when a manufacturer sets the price of its new cars or vans, it takes into account the total cost of delivery, including shipping costs. For simplicity, car manufacturers usually divide their total delivery costs equally among all the cars and/or vans they sell. When a customer buys a new car or van, he pays for “delivery”, either separately or as part of the on-road price. Although the car manufacturers themselves have done nothing wrong, customers who bought a new car or van between 18 October 2006 and 6 September 2015 are likely to have paid an increased delivery charge. The European Commission has already decided to impose fines of several hundred million euros on the shipping companies. The lawsuit seeks to recover these extra costs from the shipping companies who were involved in the cartel. The Competition Appeal Tribunal’s decision The Tribunal has authorised the claims to proceed as a class action. This means that millions of motorists and businesses could be entitled to compensation and these individuals and companies will now automatically be represented in court unless they choose to leave (opt-out) the claim. McLaren is the first Collective Proceeding Order judgment in which the Tribunal has explicitly considered the position of larger corporates within an opt-out class with the defendants having argued that big businesses should be removed and treated on an opt-in basis. The Tribunal’s refusal to treat larger businesses in the class differently to smaller corporates and consumers is noteworthy, and these aspects of the judgment will no doubt be of interest for the future proposed collective actions which feature businesses. McLaren further explored the appropriate legal test applied to the methodology in order to establish a class-wide loss at the certification stage. The Tribunal denied the defendants’ strike out request, which was based on purported inadequacies in the claimant’s methodology. The Tribunal concluded that its job at the certification stage is not to analyse the expert methodology’s merits and robustness; rather, the Tribunal will determine whether the methodology provides a “realistic chance of evaluating loss on a class-wide basis.” It further stressed that this does not imply that the Tribunal must be convinced that the approach will work, or that the methodology must be proven to work. The Tribunal emphasized the critical role of third-party funding in collective actions, as well as confirmed that the potential take-up rate by the class is not the only measure of benefit derived from the proceedings, with another benefit being the role of collective claims in deterring wrongful conduct. Despite the fact that the sums involved per class member may be little, the Tribunal focused on the fact that the total claim value is significant and that the majority of class members would be able to retrieve information about vehicle purchases. In the end, the Tribunal managed two issues that have been discussed in earlier decisions: inclusion of deceased consumers in the class and compound interest. Corresponding to the previous, McLaren was not allowed to change his case to incorporate potential class individuals who had died before procedures being given, because of the expiry of the limitation period. Regarding the latter, in contrast to the judgment in Merricks last year, the Tribunal was ready to certify compound interest as a standard issue even though it is common just to a part of the class who had bought vehicles using finance agreements. The Tribunal’s decision is conditional upon McLaren making adjustments to his methodology to account for the ruling on these points, and any determination as to the need for sub-classes. Case name and number: 1339/7/7/20 Mark McLaren Class Representative Limited v MOL (Europe Africa) Ltd and Others The whole judgment is available here: https://www.catribunal.org.uk/judgments/13397720-mark-mclaren-class-representative-limited-v-mol-europe-africa-ltd-and-others

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King & Spalding Sued Over Litigation Funding Ties and Overbilling Claims

By John Freund |

King and Spalding is facing a malpractice and breach of fiduciary duty lawsuit from former client David Pisor, a Chicago-based entrepreneur, who claims the law firm pushed him into a predatory litigation funding deal and massively overbilled him for legal services. The complaint, filed in Illinois state court, accuses the firm of inflating its rates midstream and steering Pisor toward a funding agreement that primarily served the firm's financial interests.

An article in Law.com reports that the litigation stems from King and Spalding's representation of Pisor and his company, PSIX LLC, in a 2021 dispute. According to the complaint, the firm directed him to enter a funding arrangement with an entity referred to in court as “Defendant SC220163,” which is affiliated with litigation funder Statera Capital Funding. Pisor alleges that after securing the funding, King and Spalding tied its fee structure to it, raised hourly rates, and billed over 3,000 hours across 30 staff and attorneys within 11 months, resulting in more than $3.5 million in fees.

The suit further alleges that many of these hours were duplicative, non-substantive, or billed at inflated rates, with non-lawyer work charged at partner-level fees. Pisor claims he was left with minimal control over his case and business due to the debt incurred through the funding arrangement, despite having a company valued at over $130 million at the time.

King and Spalding, along with the associated litigation funder, declined to comment. The lawsuit brings multiple claims including legal malpractice, breach of fiduciary duty, and violations of Illinois’ Consumer Legal Funding Act.

Legal Finance and Insurance: Burford, Parabellum Push Clarity Over Confrontation

By John Freund |

An article in Carrier Management highlights a rare direct dialogue between litigation finance leaders and insurance executives aimed at clearing up persistent misconceptions about the role of legal finance in claims costs and social inflation.

Burford Capital’s David Perla and Parabellum Capital’s Dai Wai Chin Feman underscore that much of the current debate stems from confusion over what legal finance actually is and what it is not. The pair participated in an Insurance Insider Executive Business Club roundtable with property and casualty carriers and stakeholders, arguing that the litigation finance industry’s core activities are misunderstood and mischaracterized. They contend that legal finance should not be viewed as monolithic and that policy debates often conflate fundamentally different segments of the market, leading to misdirected criticism and calls for boycotts.

Perla and Feman break legal finance into three distinct categories: commercial funding (non-recourse capital for complex business-to-business disputes), consumer funding (non-recourse advances in personal injury contexts), and law firm lending (recourse working capital loans).

Notably, commercial litigation finance often intersects with contingent risk products like judgment preservation and collateral protection insurance, demonstrating symbiosis rather than antagonism with insurers. They emphasize that commercial funders focus on meritorious, high-value cases and that these activities bear little resemblance to the injury litigation insurers typically cite when claiming legal finance drives inflation.

The authors also tackle common industry narratives head-on, challenging assumptions about funder influence on verdicts, market scale, and settlement incentives. They suggest that insurers’ concerns are driven less by legal finance itself and more by issues like mass tort exposure, opacity of investment vehicles, and alignment with defense-oriented lobbying groups.

Courmacs Legal Leverages £200M in Legal Funding to Fuel Claims Expansion

By John Freund |

A prominent North West-based claimant law firm is setting aside more than £200 million to fund a major expansion in personal injury and assault claims. The substantial reserve is intended to support the firm’s continued growth in high-volume litigation, as it seeks to scale its operations and increase its market share in an increasingly competitive sector.

As reported in The Law Gazette, the move comes amid rising volumes of claims, driven by shifts in legislation, heightened public awareness, and a more assertive approach to legal redress. With this capital reserve, the firm aims to bolster its ability to process a significantly larger caseload while managing rising operational costs and legal pressures.

Market watchers suggest the firm is positioning itself not only to withstand fluctuations in claim volumes but also to potentially emerge as a consolidator in the space, absorbing smaller firms or caseloads as part of a broader growth strategy.

From a legal funding standpoint, this development signals a noteworthy trend. When law firms build sizable internal war chests, they reduce their reliance on third-party litigation finance. This may impact demand for external funders, particularly in sectors where high-volume claimant firms dominate. It also brings to the forefront important questions about capital risk, sustainability, and the evolving economics of volume litigation. Should the number of claims outpace expectations, even a £200 million reserve could be put under pressure.