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Connor v Birmingham City Council, Birmingham County Court, 16 March 2005

8 December 2005
The issues

Costs – Conditional Fee Agreements – Additional Liability- CFA – Uplift – Success Fee – Whether Party Failing To Give Notice Of Uplift In Form N251 Can Recover

The facts

The Claimant brought an action with the benefit of a Conditional Funding Agreement and an after the event policy. The agreement provided for a success fee. There was also a success fee included in the terms in which Counsel was instructed. In correspondence the nature of the funding of the claim was disclosed but the last letter referring to it was dated 4th August 2003. The claim was not issued until January 2004. With the claim was served a Notice of Funding on Form N251 but that form was not properly completed in that it did not acknowledge or disclose the funding agreement or the date on which it was entered into. The Claimant sought a success fee of 100% for themselves and a success fee for Counsel. The Defendant objected pointing out that no proper notice had been given. The Claimant did not seek relief from sanctions but sought it orally when the matter came before the District Judge on Detailed Assessment.

Part 44.3 of the Civil Procedure Rules provided that a party may not recover as an additional liability any additional liability for any period of the proceedings during which he failed to provide the information about a funding arrangement in accordance with the Rule, Practice Direction or Court Order. The District Judge refused to allow the Claimant to recover a success fee. The Claimant appealed.

The decision

1. No formal application had been made for relief from sanction.

2. The promptness of an application for relief from sanctions was relevant as was the issue of whether or not the Defendant might have suffered prejudice by the failure to give notice of funding.

3. Where a Litigant was taking advantage of the mechanism of a financing litigation through a CFA with a success fee it was incumbent on him to comply strictly with the rules. The District Judge below had considered the nine circumstances which the Court had to consider under Rule 3.9 and concluded that even had an application been made, he would not have granted it. In doing so he recognised that the effect was to give the Defendants a windfall but recognised that this was the result clearly and specifically envisaged by the Rule. Contrary wise had relief been granted the Claimant would in effect have received a windfall and have prejudiced the Defendants to that extent.

Appeal dismissed.

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