Case Alert - [2018] EWCA Civ 436

Court of Appeal holds that claimant is not entitled to relief for failing to give notice of funding in time

Where a CFA or ATE insurance policy was entered into before 1 April 2013, it is still possible to recover the success fee or insurance premium from the other side. However, from 1 October 2009, such recovery is only possible if the party entering into the CFA/ATE policy informs the other parties about this arrangement "as soon as possible and in any event within 7 days of entering into" it (see the Pre-Action Conduct Practice Direction, para 9.3).

In this case, the claimant entered into a CFA with a firm of solicitors in June 2010, but did not give notice to the prospective defendant (an NHS Trust) at the time. The claimant later disinstructed that firm of solicitors and instructed a new firm. He entered into a new CFA with that firm, together with an ATE insurance policy but notice to the defendant of the second (but not the first) CFA and the ATE insurance policy was only given about 6 months later. It was held that the claimant could not recover the success fee or premium and the claimant appealed to the Court of Appeal. The Court of Appeal considered two issues:

(1) Had the claimant breached the notification requirement? The Court of Appeal held that he had and that "as soon as possible" is unambiguously clear. It was no defence to argue that requiring a party to give notice of funding at a time when it was not obliged to give details of the potential claim (and so the defendant could not assess the claim) would be absurd. Nor could it be said that there had been an obvious drafting error. If (in a rare case) it is not possible to identify all or any proposed defendants, notice would have to be given only when they had been identified.

(2) Had the judges below erred in refusing to grant relief from sanctions? The Court of Appeal held that they had not. The test in Denton v TH White had been correctly applied and the NHS Trust had suffered prejudice because of its "loss of opportunity of acting in a different and pro-active way".