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Gliddon v Lloyd Maunder Limited, Supreme Court Costs Office

18 February 2003
The issues

Indemnity Principle – Collective Conditional Fee Agreements – disclosure on Detailed Assessment – Collective Conditional Fee Regulations.

The facts

The Claimant had a personal injury action, which was Union funded. Bond Pearce were instructed on behalf of the Transport and General Workers Union for the Claimant. In August 2002, the matter came before District Judge Wainwright who gave Judgment for the Claimant and ordered costs to be the subject of Detailed Assessment. At Trial, some costs issues were raised by the Defendant in respect of the Indemnity Principle and the enforceability of a Collective Conditional Fee Agreement made between the Trade Union and Bond Pearce in February 2001. The Issue centred on disclosure of the CCFA and the District Judge ordered the matter to be transferred to the Supreme Court Costs Office for preliminary determination. Since the Costs Office could not give declaratory relief, Costs Judge O’Hare, with the agreement of the parties decided to hear the Detailed Assessment as well. The Defendants sought to show that the CCFA was unenforceable because the Claimant had not been properly informed as to the circumstances in which he would be liable to pay costs and secondly, that in any event, despite the Certificate signed by a Partner in the Bill, there was no valid CCFA and that therefore the indemnity principle was not complied with. Bond Pearce refused to disclose the CCFA but relied upon a statement by the Partner who had signed the Certificate. The Defendants relied upon a letter written by Bond Pearce to another member of the same Trade Union in respect of his own separate case against Lloyd Maunder, in which they argued that Bond Pearce had stated that the Claimant would never be liable for a success fee.

The decision

1. Under the Collective Conditional Fee Regulations 2000, the client must be informed as to the circumstances in which he or she may be liable to pay the costs of the Legal Representative.

2. The Indemnity Principle was applicable to work done under a Collective Conditional Fee Agreement. The CCFA Regulations created no new
exceptions to the principle.

3. The Claimant had not been misled as to his liability for costs and the Defendants had failed to show a breach of the contractual provision to explain the agreement as required by Regulation 4. The obligation was to explain to the litigant the consequences of the CCFA as far as he was concerned. By emphasising his costs free position that had been done correctly.

4. The Correspondence that the Defendants relied upon provided some evidence that Bond Pearce had failed to draft a valid CCFA with the Transport and General Workers Union. The evidence was not strong, but the Defendant’s reliance upon it was not fanciful. It raised a doubt. In these circumstances, the attempts on the part of the Claimant’s Solicitors to prove the validity of the CCFA by reliance upon the Certificate in the Bill and the witness statement of the Partner, was insufficient. It would not do broad justice in this case to decide that question in favour of the Claimant without first calling upon the Claimant to produce the CCFA to the Court. The reluctance on the part of the Claimant’s Solicitors to disclose the CCFA did not by itself raise an inference that the CCFA was defective. The Court would not order a receiving party to produce to its opponent documents, which the receiving party wanted to keep secret. The paying party was protected, because if those documents were not disclosed, the Court would not take into account in favour of the receiving party, any document produced to it where the receiving party has elected not to permit an inspection of that document. Accordingly, the matter would be adjourned whilst the parties sought leave either to appeal or cross appeal any part of the ruling and to consider positions.

Comments

Subsequently, on the 12th February 2003, the matter came back before Master O’Hare when the CCFA was produced to him, both in a full copy and a copy from which certain paragraphs had been removed as confidential and irrelevant. The Defendants were content for Master O’Hare to decide whether the removals were justified. He examined the CCFA and made a provisional ruling that it was valid. The Defendants did not accept the ruling and with the Claimant’s agreement, the edited version of the CCFA was produced to the Defendants, who after inspection accepted the provisional ruling of the Costs Judge. Accordingly, the Claimant was entitled to recover success fees. However, the Defendants were awarded 50% of their costs of and incidental to the Detailed Assessment to date.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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