Relief from Sanctions
This appeal was brought following three decisions handed down by Master Haworth on detailed assessment of the Claimant’s costs. The first decision confirmed that the Claimant had failed to provide a CPD 32.5(2)(c) compliant statement of additional liabilities, the second decision related to Master Haworth’s decision to refuse relief from sanction under CPR 3.9 as a result of the perceived failure to comply with CPD 32.5(2)(c) and the third decision resulted in a reduction to both the solicitors’ and counsel’s success fees to 40% and 20% respectively.
On appeal, Mrs Justice Slade approached each decision in turn and began with the ATE insurance premium. She found that the Master had, in the first instance, failed to give credence to the fact that the information required by CPD 32.5(2)(c) had been provided in November 2009 by way of written correspondence and again in the redacted insurance premium provided together with the Claimant’s replies to the Defendant’s points of dispute. Whilst Master Haworth contended that the full insurance premium information ought to have been made available to the Defendant in order to avoid prejudice and afford additional information for assessing the reasonableness of the premium itself, on appeal this formulation was rejected as being too broad. In fact, the information required by CPD 32.5(2)(c) merely requires the amount “paid or payable”. Mrs Justice Slade confirmed that this was provided in the redacted version and criticised Master Haworth’s assessment that the premium, being staged, was therefore one global sum split into parts. In sum, it was held that the information provided in the redacted version of the ATE insurance policy was CPD 32.5(2)(c) compliant.
Mrs Justice Slade confirmed that Master Haworth’s decision to dismiss the Claimant’s application for relief from sanction was based on his decision that the redacted version of the ATE premium was not CPD compliant so that the only CPD compliant document provided –that is, the unredacted policy schedule provided one month prior to the detailed assessment hearing—was late. Given the above decision on appeal, the basis for rejecting the Claimant’s application was erroneous. Notwithstanding the above, Mrs Justice Slade confirmed that since there had been failure to serve a policy schedule, redacted or not, with the Bill of Costs, the question of relief from sanctions still bore deliberation. Having regard to CPR 3.9, it was decided that the failure had been due to a mistaken belief that the information provided in 2009 and again in 2010 was sufficient and that the prejudice suffered by the Claimant for disallowing the application would be greater than that suffered by the Defendant so that relief from sanction was allowed.
The final decision considered was the success fee. Mrs Justice Slade criticised Master Haworth’s focus on quantum as a determining factor for risk assessment though commended his brief mention of the maturity of litigation as being a contributing factor. In short, she found that there had been a failure to take into consideration all of the risks including the Defendant’s position relating to quantum and liability at the time of the CFA which therefore indicated, in accordance with the ready reckoner, a higher success fee. Instead of the 75% chance assessed in the first instance, it was held that there was a 60% chance of success, taking into account all relevant factors, and 67% was awarded. In assessing Counsel’s success fee, the same considerations were addressed and it was held that a 7% reduction from the solicitor’s success fee would be appropriate to take into consideration the lack of Part 36 risk and so 60% was awarded.