Blog - Tuesday 4 November 2014

There and back again: A Mitchell tale – an (un)expected journey?

The case of Long v (1) Value Properties Limited (2) Ocean Trade Limited [2014] EWCH 2981 (Ch.) concerned an appeal against the judgment of Master Rowley applying the sanction for failure to serve the further information listed in CPR.PD.47 para 32.5 which is imposed by CPR.r.44.3B (1) (d).

‘(1) Unless the court orders otherwise, a party may not recover as an additional liability –         

(d) any percentage increase where that party has failed to comply with –

(i) a requirement in the Costs Practice Direction; or

(ii) a court order,

to disclose in any assessment proceedings the reasons for setting the percentage increase at the level stated in the conditional fee agreement;'

This sanction imposes an ‘all or nothing’ [see para 9] penalty removing the claimant’s right to recover any of the success fee from the Defendants. 

Non-compliance with CPR.PD.47 para 32.5 was raised by the Defendant in PODs for failure to serve the paying party with copies of the conditional fee agreements and a statement setting out details of the success fee. This was countered with the receiving party stating this was an inadvertent omission however at first instance Master Rowley, despite having qualms about the sanction to be imposed decided that the breach was not trivial and there being no good reason for granting relief.

To put the appeal in context as to the sums of money involved due to the imposition of the sanction – this is detailed in paragraph 8 of the judgment:

                ‘…I am told that together the success fees of counsel and solicitors amount to £48,462.00, comprised in a total bill of £131,937, which will go to detailed assessment…’.

Three points were considered by Barling J on appeal:

  1. Whether a breach of the CPR occurred;
  2. If so, what is the applicable sanction (if any) for that breach;
  3. Whether relief should be granted

Barling J referred to paragraph 40 and 41 of the Denton decision which confirms that Mitchell remains ‘substantially sound’.

Whilst Barling J noted in paragraph 74 that his decision would have been made regardless of Denton it was his view that the breach was ‘…properly regarded as ‘insignificant’ and therefore ‘trivial’ as those expressions are understood in light of the guidance in Mitchell...’.

Click here to read the full Judgement

By Nicholas J Browne, Solicitor