12 August 2014Print This Post

“Slip, mistake or oversight” over funding notice was not significant failure, High Court rules

Royal Courts of Justice

Non-compliance made no “substantial difference” to defendants

The failure by a claimant’s solicitors to inform the other side of a replacement conditional fee agreement (CFA) could be accurately described as a “slip, mistake or oversight” and not a “significant” failure under the ruling in Denton, the High Court has decided.

Christopher Pymont QC, sitting as a deputy High Court judge in the Chancery Division, said the defendants argued that failure to comply with the duty to give notice to changes in a funding agreement “must” be serious or significant.

However, applying the first stage of the Denton test, Judge Pymont said regard must be had to the “circumstances and effect” of the non-compliance, which in this case would have made no “substantial difference” to the defendant.

“I take the view that, now the claimants have made their application for relief, the court simply has to apply the approach and guidance set out in Denton to the facts proved.

“I say nothing about other cases in the circumstances – where, for example, the new funding arrangements involved different persons and that was a point of significance to any of the parties”.

The High Court heard in Ultimate Products and another v Nigel Woolley and another [2014] EWHC 2706 (Ch), that Mr Woolley’s solicitors, Collyer Bristow, entered into a replacement CFA, increasing the success fee from 32% to 100%.

Collyer Bristow did not notify the defendants of the change, as they should have done under CPR 44.15(2), though they were not required to give details of the new success fee.

The defendants argued that this meant that the claimants were not entitled to recover any success fee. The claimants applied for relief from sanctions, in respect of their first instance costs. Master Price ruled that they were entitled to full relief.

Moving on to the second stage of the Denton test, Judge Pymont said the failure to comply with the rules in respect of the replacement CFA was “correctly characterised by the Master as a slip, mistake or oversight” on the part of the claimant’s solicitors.

The judge said the defendants argued that this was a “bad reason” for non-compliance, but this was an “inappropriately harsh” conclusion, particularly as the claimant’s solicitor initially intended to proceed by way of variation to the existing CFA.

Judge Pymont said the claimants “volunteered” the information that they intended to increase the success fee, which was “more information than the defendants were entitled to”.

He said this meant it was not a case where the new CFAs could have come “as any great surprise” to the defendants. He dismissed the defendants’ appeal.

 

By Nick Hilborne

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