Legal Cost Specialists

Legal Costs Blog 2014 Award for Most Startling Legal Discovery

The Legal Costs Blog 2014 Award for Most Startling Legal Discovery goes to Mr Justice Barling in Long v Value Properties Ltd & Anor [2014] EWHC 2981 (Ch) when giving judgment on the interpretation of the old notification requirements concerning additional liabilities:

“The provisions as they currently stand are obscure, unnecessarily complex, and in need of rationalisation.”

4 thoughts on “Legal Costs Blog 2014 Award for Most Startling Legal Discovery”

  1. As a defendant I have been keeping pretty quiet about this decision.

    The way the rule was intended to operate seemed pretty clear to me and that is exactly the way Master Rowley stated – namely serve the section 32.5 info re success fee level with the bill with the N252. Dear Judge Barling this is because the paying party needs the info to know if the success fee is reasonable or not when making an offer. OK so the risk assessment itself is usually nonsense, suggesting an endless list of unlikely and generic eventualities were deemed a major risk in this case. However, it is useful to know if the success fee is staged and what the stages are. The paying party also needs to know if the CFA is “no win no fee” or “no-win reduced fee agreement” (ie the sham agreements entered into by panel solicitors who were getting paid their usual rate whether they won or loss). The PP also needs to know if Part 36 is a risk especially in C v W type situations or conversely in Woods v Worthing situations. Hence why the info needs to be served with the bill so the defendant can consider the appropriate level of offer to make, hence the rule and hence the sanction. Sanction has to be to disallow all success fee as otherwise it just relates to DA costs and is meaningless. Paying partuies now have to make an app for disclosure of CPD S32.5 info if not served and receiving parties relies on this ill thought out decision.

    Basically this was a clutching at straws by counsel in a pre-Denton era judgment where relief may not have been granted. The correct decision was: yes there was a breach, relief granted, claimant pay defendant’s costs for period of non compliance.

  2. Not quite sure about King Costs’ point.
    Barling J expressly held that the PD 32.5 statement DID have to be served with the Bill, whereas the comment seems to suggest that he held the opposite.
    The appeal included a number of points, one of which was trying to reverse Middleton v Vosper, which had also held that the info had to be served with the Bill.
    On this point, the appellant failed.
    The appellant succeeded on 2 points. Firstly, that relief should have been granted (and I imagine there is some truth in the suggestion that if Mitchell had not been the dominant case at the time the appeal was made the other points might never have appeared).
    Secondly, that if relief had not been granted, the sanction was not full but only partial disallowance of the success fee. It did not succeed in the argument that there was no breach.
    Accordingly, there is no need for the applications etc that are suggested. The PD 32.5 documents must be served with the Bill and Long confirms Middleton. If they aren’t, not only does the (limited) sanction bite, but of course you could always get an unless order. The sanction is not wholly toothless, because if they still aren’t served by DAH, then the RP will not get a success fee e.g. on the replies, preparation and attendance at hearing.
    True – the sanction is now not very significant, but there Barling’s point was pretty simple. Draconian sanctions will only be imposed if the rule is clear and here it wasn’t.
    So – the decision in fact WAS – there is a breach, relief granted (though the judge differed on the costs point from the suggestion, because of the view he took of D’s conduct on the facts).

    PS – counsel may have been clutching at straws in light of Mitchell (not least because someone else had apparently conceded at the DAH that the breach was not trivial), but since one of those straws was good enough to have won the appeal if the relief point had failed, and save his client a lot of money, perhaps it wasn’t such a bad idea after all.

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