Gutman v Apple Inc & Ors: Court of Appeal sides with funders
A recent Court of Appeal judgment has drawn attention across the legal and funding sectors, addressing key questions around the treatment of funders in collective proceedings. The ruling, which stems from a long-running dispute involving Apple, may have broader implications for how such cases are managed moving forward.
The Court of Appeal sided last week with litigation funders in case that had large ramifications for the industry.
The Background
As part of a long-running CAT dispute, Apple appealed whether the CAT had the ability to order the funders be paid out of the damages awarded, prior to the payment of the class.
The Ruling:
The court unanimously ruled that funders can take fees before any damages are doled out to class members. The court agreed with the CAT that there are requisite safeguards in place, both from the CAT’s own powers (such as the ability to refuse to certify a class or a CR if it has concerns) and from the LFA (such as in this case, where the CR and acting solicitor had “independent control” over proceedings). Moreover, the court found that under 47C3(a) and (b) of the Competition Act 1998, the CAT has “wide unrestricted powers” to make, in the words of the court in Le Patourel, “any case management order it sees fit… to ensure that funders and representatives are paid.”
Rejecting Apple’s submissions regarding jurisdiction, the court concluded “that the CAT does have jurisdiction to order the funder’s fee or return can be paid out of the damages… in priority to the class” and that whether the CAT would make such an order falls under its supervisory jurisdiction.
The Parties:
Chambers ranked barristers appeared for both the appellants and respondent. Our ranking tables for: Commercial Dispute Resolution, Competition and Costs can be found by clicking the above links.
Lord Wolfson KC of One Essex Court led Lucinda Cunningham of Matrix Chambers for the Appellants.
Nicholas Bacon KC of 4 New Square acted for the Respondent.