Findlay v Cantor Index Ltd & Ors, Court of Appeal - Supreme Court Cost Office, September 02, 2008, [2008] EWHC 90116 (Costs)

Resolution Date:September 02, 2008
Issuing Organization:Supreme Court Cost Office
Actores:Findlay v Cantor Index Ltd & Ors

Case No: HQ06X0041Neutral Citation Number: [2008] EWHC 90116 (Costs)IN THE HIGH COURT OF JUSTICESUPREME COURT COSTS OFFICEClifford's Inn, Fetter LaneLondon, EC4A 1DQDate: 2 September 2008 Before :MASTER CAMPBELL- - - - - - - - - - - - - - - - - - - - -Between :- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -Mr Gordon Wignall (instructed by Russell Jones and Walker) for the ClaimantMr Philip Bowden (instructed by Linklaters LLP) for the DefendantHearing date 18 August 2008: - - - - - - - - - - - - - - - - - - - - -JudgmentMaster Campbell: 1. This judgment addresses the following issue which arises at the outset of the detailed assessment of the costs of the Claimant (``Mr Findlay'') which are payable by the Defendants (``Cantor Index'') following Mr Findlay's acceptance of an offer under CPR part 36 on 18 May 2007 : is Cantor Index entitled to disclosure of a Conditional Fee Agreement (``CFA'') made between Mr Findlay and his solicitors, Russell Jones & Walker on 12 June 2006, and to an opinion of counsel referred to in a risk assessment prepared by those solicitors, on the grounds that privilege in both has been waived?2. The issue was argued before me by Mr Bowden, instructed by Linklaters, LLP for Cantor Index, and by Mr Wignall of counsel instructed by Russell Jones & Walker for Mr Findlay. The application for disclosure had been issued on 5 August 2008 and was supported by a witness statement made by James Russell of Linklaters dated 30 July 2008 to which Mr Paul Daniels of Russell Jones & Walker had responded on 15 August 2008. In addition, Mr Bowden lodged a skeleton argument. Having heard argument I reserved judgment.THE BACKGROUND3. This can be stated shortly. Mr Findlay is a former managing director of Cantor Index. Following a dispute with the company, he ceased his employment on 30 January 2006 and commenced proceedings on 13 March that year claiming damages for breach of his employment contract. Subsequently, on 28 July 2006, Mr Findlay brought a claim in the Employment Tribunal for unfair dismissal. The claim in respect of his employment contract was resolved following his acceptance of the Part 36 offer; the Employment Tribunal claim has also been settled on terms confidential to the parties. Greater detail about the background (if it is required) is set out in a judgment of Holland J dated 23 March 2007 [2007] EWHC 643 (QB).4. Mr Findlay served Notice of Commencement of detailed assessment proceedings on 23 October 2007, his bill claiming a grand total of £1,038,316.30 inclusive of disbursements, VAT and the fee payable to the court on lodgement. On 18 October 2007, Linklaters served points of dispute running to 81 pages (their length being indicative of scant regard having been paid to s.35.2 of the Costs Practice Direction (CPD) to CPR 47.9). Point 4 says this:``Costs claimed pursuant to a Conditional Fee AgreementThe bill of costs claims a success fee of 100 per cent under a purported Conditional Fee Agreement. The claimant has failed to provide a statement of reasons for setting the level of success fee in accordance with s.32.5 of the Costs Practice Direction to CPR 47.In accordance with CPR 44.3B the claimant is not entitled to recovery under the funding arrangement for any percentage increase for failure to comply with the Costs Practice Direction.Furthermore the defendants requested disclosure of the Conditional Fee Agreement in accordance with the principles of openness set out in the authorities referred to above. The claimant has rejected this request and it is not understood why the claimant's solicitors should refuse such a request for disclosure.The defendants have a genuine concern over the level of the success fee claimed. The claimant has failed to provide any information to justify a success fee, let alone a claim for the maximum that can be recovered under a Conditional Fee Agreement ......the defendants reserve their position to make further submissions with regard to the claimant's entitlement to claim costs under the Conditional Fee Agreement following receipt of information and disclosure of the agreement.''5. On 15 May 2008, Russell Jones & Walker served replies to the points of dispute. The reply to point 4 says this:``Whilst the defendants request disclosure of the Conditional Fee Agreement, the paying party are reminded that this is of course a CFA governed by the new Regulations and accordingly the receiving party see no other explanation for the request for disclosure than a speculative fishing expedition, the nature of which the courts of course discourage. The bill of costs was signed by a partner at Russell Jones & Walker to confirm that there has been no breach of the indemnity principle is for the paying party to particularise a genuine issue with the CFA and no such issue has been raised to be answered.Whilst the bill claims for a 100 per cent success fee, it should be noted that the success fee was (as is common practice in such matters) set on a sliding scale basis, of 50 per cent prior to the receipt of Directions issued by the court, 75 per cent between the issue of Directions and notification of the Trial window by the Court and only at 100 per cent from thereafter. The Defendants had the opportunity to settle the matter earlier and avail themselves of a lower success fee but did not do so.''6. Concurrent correspondence between Linklaters and Russell Jones & Walker also addressed the CFA (see exhibit JR 1). On 13 November 2007, Linklaters had written to Russell Jones & Walker in these terms:``We also note that a substantial proportion of the costs claimed by your client relate to a success fee of 100 per cent charged in accordance with the Conditional Fee Agreement between your firm and your client. Our costs draftsman has requested a copy of this agreement to assist him in this process.''7. On 23 November 2007, the request was repeated:``We note that you have still not responded to our request that our costs draftsman be provided with a copy of the Conditional Fee Agreement to assist him in the process of advising our client in this regard. Without sight of this agreement our costs draftsman is unable to advise as to the recoverability of the uplift you are claiming, which will necessarily need to be excluded from the calculation of any interim payments which our clients are minded to make ...''8. On 30 November 2007 Russell Jones & Walker replied:``With regard to disclosure of the CFA we cannot see your reasoning behind such a request and see it entirely as a fishing expedition, which of course the courts strongly discourage. The bill of costs has been signed by a partner at Russell Jones & Walker to confirm that there has been no breach of the indemnity principle and we would respectfully refer you to Cole v MGN before Master Haworth at the Supreme Court Costs Office (whose comment is regularly upheld by the court) that it is for the defendants to particularise the genuine issue within a CFA and that it is for the Costs Judge to adjudicate on this under the Pamplin procedure prior to a claimant being...

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