The Senior Court Costs Office has become the latest court to refuse relief from sanctions, saying that though its decision was harsh, “the claimants’ solicitors should have known the change that was coming”.
The case involved a failure to serve notice of funding and Master Gordon-Saker refused relief even though he accepted that the solicitors – McHale & Co – had intended to serve it and indeed may have actually done so. But they were unable to prove that they had.
Harrison & Anor v Black Horse Ltd  EWHC B28 (Costs) was a payment protection insurance mis-selling case handled under successive conditional fee agreements that went through two appeals and settled after permission to appeal to the Supreme Court was granted. The defendant agreed to pay the claimants’ costs throughout, except for after-the-event insurance premiums.
The dispute concerned the appeal to the Court of Appeal, for which the claimants claimed costs of nearly £1.5m, and whether notice of funding was given. The absence of evidence that it had been put into the DX meant service could not be deemed under CPR 6.26. The automatic sanction was that the claimants could not recover any success fees.
Considering the application for relief from sanction, Master Gordon-Saker accepted at face value – in the absence of any direct challenge – the defendant’s assertion that its approach to the appeal might have been different, and that its solicitor’s advice in relation to settlement would have been different, had the notice been received. However, the court could not say that the defendant would have behaved differently as a result.
The judge said that this would have been a “borderline case” for relief under the old version of CPR 3.9, but post-Mitchell the failure was not trivial and the claimant had not shown good reason for the failure to give notice.
He said: “This may seem harsh, particularly given my view that the failure was not intentional. But the claimants’ solicitors should have known of the change that was coming. The amendment of CPR 3.9 was recommended by Lord Justice Jackson in his final report published in December 2009.
“The change of approach and the ‘Singapore experience’ were emphasised by him in the fifth implementation lecture on 22 November 2011. The new, tougher approach to relief from sanctions was again emphasised by the Master of the Rolls in the 18th implementation lecture on 22 March 2013.”
A delay in applying for relief also counted against the claimant – the defendant served its points of dispute in February, the judge had suggested an application for relief in March, but it was not made until July.
The judge acknowledged the recent High Court ruling in Forstater, where the claimant failed to serve notice of funding but then gave the information in correspondence, with relief granted from the date of the letter. Agreeing that this then made it “a failure of form rather than substance”, he noted that the court did not grant relief from the period before the letter.