A High Court judge has granted relief from sanctions where a successful party failed to serve a notice of its funding arrangements on form N251.
Though the judgment was drafted before the Court of Appeal handed down Mitchell  last week, Mr Justice Norris said he took account of the decision and did not need to revise his draft ruling, “which I consider proceeds upon correct principles”.
The costs ruling in Forstater & Anor v Python (Monty) Pictures & Anor  EWHC 3759 (Ch)  – which followed a high-profile claim for royalties arising from the play Spamalot – heard that when the second claimant was joined to the first claimant’s conditional fee agreement (CFA), it failed to complete and serve form N251.
This meant that, under CPR 44.3B, upon winning it was unable to recover any part of its success fee unless the court ordered otherwise.
The defendants were later made aware of the CFA through correspondence.
Norris J said the failure to serve the N251 was “simple oversight” and that there was “no good explanation” for it.
While not suggesting it had suffered any prejudice, the defendant said this made no difference, relying on the observations of Mr Justice Floyd in Supperstone v Hurst  EWHC 735, who said that relief should not be granted lightly and that if a party does not have a good explanation, “relief from sanctions will usually be refused”.
He continued: “It is vitally important to the administration of justice that the rules of procedure are observed.”
Norris J said that while he agreed with this “statement of principle”, it was not the statement of a rule.
He drew a distinction between a failure, through human error, to comply with a rule of general application – as in this case – and “a conscious failure to comply with a specific order made in the action itself”.
The judge said that when the defendant had been informed of the CFA, “the policy embodied in CPR 44.3B had… been fulfilled (albeit not in a technically correct way) and the substance of the rule was then complied with. The conveying of the requisite information in letter instead of on form N251 had no discernable impact on the conduct of the action.”
Norris J was also clearly influenced by the fact that to refuse relief would leave the second claimant liable to pay the success fee and possibly lead to litigation with its solicitor, while granting relief would deprive the defendant “of what may properly be regarded as a windfall (in that it received the relevant information on the wrong piece of paper)”.
As a result, he granted relief from the date when the letter was sent.