Compensation Specialists Ltd & Ors v Compensation Claims Services Ltd

On a renewed application for permission to appeal, a proposed contractual ground may proceed where it is at least arguable, without the court determining its ultimate correctness. The court granted permission to challenge whether an interim arrangement could be terminated without notice. It also granted permission on a cross-claim issue, conditional on clarification of the alleged contractual terms, breaches and loss. That clarification did not finally determine any pleading issue or require amendment. The court accordingly granted permission on both grounds and made consequential procedural orders.

The individual claimants had acted as franchisees for the defendant, which acted as franchor and allocated claims to solicitors. Before 1 April 2000, remuneration was calculated as a percentage of recoveries. Following the enactment of the Access to Justice Act, that arrangement became impracticable. No fresh agreement was concluded, but the High Court judge found that an interim agreement arose between the first claimant and the defendant from 1 April 2000, with payment fixed at £550 per case.

The defendant sought renewed permission to appeal on two grounds. The first concerned whether the interim arrangement could be terminated without notice. The second concerned alleged breaches of the earlier arrangements and related cross-claims. The application was heard by the Court of Appeal after refusal on the papers.

Disposition. The renewed application for permission to appeal was granted on both proposed grounds. Permission on the second ground was conditional on clarification of the issues.

1. Termination of the interim arrangement. The defendant argued that termination required notice, relying on the lengthy fixed terms of the earlier agreements, some lasting five or ten years. The court considered that the proposed argument was at least arguable. It therefore granted permission without deciding whether termination without notice was wrongful or what period of reasonable notice would be required. The defendant had suggested that the appropriate period might be three years, while the matter had been advanced before the trial judge on the basis of at least one year.
2. Cross-claims. The defendant argued that the earlier arrangements continued for purposes beyond assessing payment and that actionable breaches had occurred after the interim agreement began. The court was more reluctant to grant permission on this point, but did so because permission was being granted on the first point. The defendant had to lodge and serve a supplementary skeleton argument identifying precisely the contractual terms relied on, the alleged breaches and the loss said to result. The court was not satisfied that those matters were clearly identified in the existing pleadings.
3. Procedural directions. The clarification condition was not a final determination of any pleading issue, and the court did not require amendment of the pleadings. A stay was granted in relation to specified parts of the High Court order, subject to payment of £14,000 within 14 days. The appeal was directed to be heard by three judges, with a time estimate of one day.

• Court of Appeal (Civil Division): On a renewed application after refusal on the papers, permission to appeal was granted on two grounds under [2002] EWCA Civ 1603.
• High Court, Queen's Bench Division: His Honour Judge Geddes QC, sitting as a deputy High Court judge, had found that an interim agreement arose from 1 April 2000 and had determined the related termination and cross-claim issues.