APPLICATION FOR RELIEF FROM SANCTIONS REFUSED WHEN PARTY FAILED TO SERVE STATEMENT OF REASONS: FULL TRANSCRIPT AVAILABLE

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There is a decision by Master Rowley in the case of Long -v- Value Properties Ltd 13/1/14 available on dropbox at https://www.dropbox.com/s/h8keoeme94gvrzp/Long%20v%20%20Value%20Properties%20%26%20Anor.pdf

THE APPLICATION FOR RELIEF FROM SANCTIONS

This was an application for relief from sanctions arising out of a failure to serve copies of the CFAS or relevant details of the success fees. The judgment observes.

“Following settlement, detailed assessment proceedings were commenced in October 2013 but no statement of reasons or other
information was served contrary to Section 32.5 of the Costs Practice Direction which applies to this case by virtue of CPR Rule 48.1.

2. Consequently, the Claimant has applied for relief from sanctions in the following terms.
“That the Claimant/receiving party be relieved from any sanction imposed by
CPR 44.38 and/or any Sections of the Costs Practice Direction, for failing to
serve the paying parties’ solicitors with copies of the CFAs and/or a statement
setting out the relevant details of the success fees in accordance with CPR
32.5. ”

RELIEF FROM SANCTION REFUSED

A large number of applications were raised by the claimant. Including an argument that Mitchell was inconsistent with Wyche.  However, despite reservations about the nature of the sanction being disproportionate the Master found:

  • There was a breach of sanctions.
  • The oversight was not trivial as defined by Mitchell.
  • Relief from sanctions could not be granted.

The Master observed:

“39. The decision in Mitchell is clearly the Court of Appeal’s opportunity to turn Sir Rupert
Jackson’s extra-court pronouncements into judicial precedent. The Court’s decision in
Durrant reinforces that position. I do not think I can realistically follow a different
approach based on one High Court decision, as Mr Power encouraged me to do, even
if I considered that to be the appropriate course. Furthermore, even if Mitchell is being
appealed, and I have no information on that, the case of Durrant makes it clear that the
Court of Appeal’s general view is clear on applications of this sort. Therefore, whilst I
may have qualms about the nature of the sanction imposed for a breach of this
particular provision of the CPR, I am clear that I need to take that as being the correct
sanction and simply concentrate on whether the breach was trivial and if not whether
there is a good reason for granting relief. Both of those questions are to be answered in the negative in this case”

THE FAILURE WAS RECOGNISED AS WHOLLY DISPROPORTIONATE

The Master recognised that there was a marked difference between a failure to give notice of funding, when the additional liability is deferred until proper notice is given, and a failure to serve a copy of the CFA at the beginning of the assessment process:

Where a Notice of Funding is not served for a period of time, the success fee is disallowed for
that period of time but is recoverable once the requisite Notice has been served. If no
Notice is ever served, then clearly the entire Success Fee is at risk. But there is at
least an escape route of sorts for a party who overlooks serving the relevant notice
immediately and then rectifies his error. The sanction for a failure to provide
information at the commencement of Detailed Assessment proceedings however has
no similar provision for late notice and as such it is all or nothing.”

However disproportionate or not relief from sanctions was not granted.

COMMENT

Clearly it is essential that all the relevant notices are served at the outset of the assessment process.  There is no easy remedy if they are not. Obtaining relief from sanctions remains difficult.  It is another example of Mitchell in action.