The defendant costs specialists

Relief from sanctions

By on Apr 27, 2011 | 11 comments

Lord Justice Jackson has decided that the recovery of success fees from defendants is wrong. The senior judiciary has agreed (see for example paragraph 39 of Sousa v London Borough of Waltham Forest [2011] EWCA Civ 194). The European Court of Human Rights has agreed (see MGN Limited v United Kingdom (Application No. 39401/04)). The government has adopted this view as official policy.

How likely is that an application for relief from sanctions, in relation to a failure to give proper notification of funding, will succeed in the current climate?

    11 Comments

  1. Ooh, very bad point Simon!!

    The Supreme Court has made it very clear that until and unless the legislation changes, then success fees remain a part of the currently recoverable costs from a paying party

    Whilst that will obviously change in early course thanks to Jackson and Clarke, I guarantee that any DJ whom rejects an application for relief on the basis yousuggest, will be the subject of an instant (successful) appeal

    Anonymous

    27th April 2011

  2. Which Supreme Court decision are you referring to?

    Simon Gibbs

    27th April 2011

  3. not supreme court but didnt C of A make that point in de sousa?

    chrisa

    27th April 2011

  4. Yes, having declined to hear submissions on the question of whether there was a breach of the Defendant’s Article 6 rights. So, hardly binding or definitive.

    Simon Gibbs

    27th April 2011

  5. At present the courts are bound by Campbell v MGN – the House of Lords decision which says they’re recoverable. ECHR is not binding and so the courts cannot go behind the House of Lords ruling.

    Graham

    27th April 2011

  6. Having declined to hear argument on the Article 6 point they have made it clear that there is no Article 6 issue in PI surely

    chrisa

    27th April 2011

  7. Lord Justice Ward said: “The appellant floated a second argument, not previously raised. That is that success fees have such a “chilling” effect as to amount to a denial of justice and a fetter on the freedom of access to the court in breach of Article 6. I agree with the respondent that this is not an argument the appellant should be allowed to run at this stage of the proceedings. I am not prepared to entertain the argument: indeed I am far from convinced on cursory examination that it is well founded”.

    Having decided not to allow the argument to be run at this stage (ie after the actual appeal hearing) and giving it just a “cursory examination” it would be unwise to suppose this is the last word on the subject; at least until the Supreme Court considers the matter.

    Simon Gibbs

    27th April 2011

  8. Yes, I am afraid I am with Anon. It is completely irrelevant, and makes no difference at all to pending cases. Master Hurst is 100 pc behind Jackson, but he has also just dismissed every single one of a defendant’s objections to a £10 million ATE premium in Trafigura. The present law is applied there, and will be applied in future RFS applications.

    Jacques Hughes

    27th April 2011

  9. RFS applications require the court to consider “the interests of the administration of justice” (CPR 3.9(1)(a)). Although many courts may well find their hands tied when allowing/assessing success fee/ATE premiums under the current rules under normal circumstances, the position is likely to be different with RFS applications. The starting point where there has been a breach is that the additional liability is not recoverable. The concept of the “administration of justice” is a flexible one and may be largely said to reflect public policy considerations that may change over time. Previously the argument was that is was “disproportionate” to disallow a success fee simply because of an oversight of the rules. Post-Jackson the public policy considerations have arguably swung heavily in favour of the paying party.

    Simon Gibbs

    27th April 2011

  10. Simon, if i find one of my clients has regrettably placed himself in the position of needing to make such an application, I will gladly recommend you to the Defendants to run this argument of yours. The interests of the administration of justice, is just one of the considerations under CPR3.9, but it is intended to balance for both parties, not to impose a penalty – indeed, RFS applications are intended for exactly the oppositite of a penalty already imposed

    I greatly respect your experience and opinions, but think you are at the bottom of the wrong tree with this one, my friend

    Anonymous

    29th April 2011

  11. The Campbell v MGN case is stated above to be authority – does anyone know what paragraph to look at?

    olivia

    16th September 2011

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