Failure to obtain after the event insurance cover

The Court of Appeal reviewed the jurisdiction to make a non-party costs order (NCPO) against a solicitor who has acted under a conditional fee agreement without the benefit of after the event (ATE) insurance. A solicitor’s unconscious breach of duty in failing to arrange an ATE policy for a client was an insufficient basis upon which to make a NPCO against the solicitor. NPCOs could otherwise potentially extend to every act of negligence by a solicitor in the conduct of litigation (Heron v TNT (UK) Ltd - see our briefing).

Non-party costs orders against solicitors

Where there is an issue as to whether the claimant’s solicitor has prime pumped the litigation for an impecunious claimant by funding disbursements, it will not generally be appropriate to seek an order for disclosure from the court. The successful defendant should invite the claimant to reveal the extent to which the litigation has been supported by a third party, and to provide any reason why the costs order should not be enforced against them (Flatman v Germany).

Commercial rate of interest

In the light of recent interest rate developments, there is no presumption that base rate plus 1 per cent is the appropriate measure of a commercial rate of interest. A ‘newco’ set up to buy a business in a private equity transaction was awarded base plus 3 per cent, reducing to base plus 2.5 per cent from Feb 2009, to reflect the slightly less restrictive credit conditions than those in immediate aftermath of the credit crunch in 2007 (Sycamore Bidco Ltd v Breslin).

Claims for compound interest

Pleading a claim for damages was not good enough to entitle the claimant bank to claim interest as damages since Sempra Metals requires the party claiming to plead a claim for actual interest losses (JSC BTA Bank v Ablyazov).

Defective witness statement

The court struck out most of a director’s witness statement for abuse because it contained a description of events of which the witness had no direct knowledge and contained commentary on documents, argument and expressions of opinion on market practice. Permission to rely on expert evidence had been refused. The fact that the company no longer had anyone with direct knowledge of the relevant events working for them was immaterial (JD Wetherspoon Plc v Harris).

Relief from sanctions

Where an application for an extension of time for service of the particulars of claim was made before 1 April 2013 but heard afterwards, the new version of CPR 3.9 did not apply but the new version of the overriding objective in CPR 1.1 did. The practical effect of applying the new version of the overriding objective to the nine factors set out in the pre-April version of CPR 3.9 was to require the court to take a more robust approach than it would have done pre-April 2013. The claimant’s application failed (Venulum Property Investments Ltd v Space Architecture Ltd – see our briefing).