A round-up of some recent litigation cases – January 2018

Proportionality test

The Court of Appeal held that the old proportionality test applies to the success fee and after-the-event insurance premium in a pre-commencement funding arrangement where additional liabilities are still recoverable from the defendant. It reversed the decision below which applied the new Jackson proportionality test to the recovery of additional liabilities in privacy proceedings (BNM v MGN Ltd).

Relief from sanctions

Opposed applications for relief from sanctions based on minor procedural glitches are on the rise, having dried to a trickle after Denton v T H White Ltd. Coulson J warned that parties who seek to take advantage in this situation will be penalised in costs. The defendant had complied with an incorrect notice sent from the court requiring budgets to be filed within 7 days of the CMC. The claimants took a point on this saying that he should have filed in accordance with CPR 3.13 within 21 days. They were ordered to pay the defendant’s costs of the successful application for relief (Freeborn v Marcal (t/a Dan Marcal Architects)).

Security for costs

Where insurers may have a right to avoid an after the event insurance policy, for example where it does not contain an anti-avoidance clause, the policy will not constitute adequate security for costs. The Court of Appeal reversed the decision below. The court could not be satisfied that the prospect of avoidance was illusory and the insolvent claimant companies had refused to provide a deed of indemnity (Premier Motorauctions v Pricewaterhouse Coopers).

Pre-action disclosure

An application for pre-action disclosure is a free-standing set of proceedings and the court has jurisdiction under CPR 6.36 to order service of such an application out of the jurisdiction in an appropriate case (ED&F Man Capital Markets LLP v Obex Securities LLC).

Assignment of CFA

The Court of Appeal ruled that a pre-1 April 2013 conditional fee agreement can be assigned from one law firm to another without losing the right to recover the success fee from the defendant. This is the position whether the assignment or novation took place before or after 1 April 2013 (Budana v The Leeds Teaching Hospital NHS Trust).