Costs judge grants relief over failure to serve N251 – yes, really!

Rowley: Mitchell aimed at human errors occurring after April 2013

A costs judge has granted relief from sanctions in a case where the failure to serve notice of funding occurred some 15 months before the introduction of the Jackson reforms.

Master Rowley said that the message sent by the Court of Appeal in Mitchell “seems to me to be aimed at current and future practice, rather than being a stick to beat parties with for errors for which relief, rightly or wrongly, would routinely have been granted had an application been made at the time”.

In Burton v Cranfield Delta Whiskey Group – the substance of which was resolved at trial in September 2012 – Master Rowley found that human error meant that the claimant’s solicitors, Irwin Mitchell, had failed to issue the N251 about their conditional fee agreement (CFA) after they took over from the original solicitors. The firm’s case management system had copies of the draft notice and accompanying letter, but neither the defendant nor court received them.

The case was listed for detailed assessment in February 2014 and no issue was taken over the N251 until points of dispute were filed in February 2013. The claimant first attempted to deal with the matter informally, but after the defendant made it clear that an application needed to be made, the claimant promptly did so in October 2013, seeking a ruling that the N251 had been served or, failing that, relief from the sanction of not being able to recover the success fee.

The hearing was held before the Mitchell ruling, but final judgment handed down after and took the Court of Appeal’s comments into account.

The defendant did not establish that it had suffered any prejudice, the master said, and added that the claimant had a CFA with her first solicitors: “It would have been surprising if [she] had a less advantageous retainer with her new solicitors and, in the absence of any evidence from the defendant to suggest it thought otherwise, I am driven to consider that the defendant probably took a similar view.”

The non-deliberate nature of the failure became relevant because of the Court of Appeal’s stance in Mitchell that human error was not a sufficient excuse for relief. “However, it seems to me that the reasoning in Mitchell is very much aimed at human errors occurring after April 2013, rather than 15 months or so before,” Master Rowley said.

Given that it was reasonable for Irwin Mitchell to believe from its systems that the N251 had been served, “I cannot see how the claimant’s error could realistically have come to light prior to the detailed assessment proceedings and so the claimant could not have made an application prior to the new regime coming into force.”

Also, there was no impact on the administration of justice, as the master was able to list the application following the settlement of another case. Moreover, he suggested that dealing with this discrete issue may save court time by aiding a settlement.

Master Rowley made no order for costs on the application.

Shaman Kapoor of Temple Garden Chambers was instructed by Irwin Mitchell, against Robert Marven of 4 New Square, instructed by Holman Fenwick Willan.

In another recent case, Master Rowley refused relief, despite his “qualms” over the sanction.

    Readers Comments

  • George Bladon says:

    Seems like a sensible and practical solution to the Mitchell issue as it would clearly be inequitable to apply sanctions retrospectively.

    It is refreshing to have common sense applied – maybe this is because Master Rowley is a new appointment so is a more recent practitioner and more in tune with reality?

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