Supperstone v Hurst & Anor

Relief from a procedural sanction is a discretionary remedy which should not be granted lightly. Under CPR 3.9, the court must consider all the circumstances, including the explanation for default, promptness, compliance with other requirements, and the effect on each party. Where the evidence reasonably supports the first-instance judge’s findings and the default has caused no material prejudice, an appellate court should not interfere merely because it might have assessed the evidence differently. A party seeking to challenge relief should place before the first-instance court evidence of the prejudice said to have been suffered.

The claimant, trustee in bankruptcy, sought to recover additional liabilities consisting of a conditional-fee success fee and an after-the-event insurance premium. The relevant funding notices were served late and were defective, engaging the sanction under CPR Part 44.3B(1)(c).

The Costs Officer allowed the additional liabilities. Master Gordon-Saker accepted that proper notice had not been given but granted relief from sanction. The second defendant appealed, arguing that there was insufficient evidence for the Master’s findings about the explanation for default and the absence of prejudice. The central issues were whether the Master had been entitled to exercise his discretion as he did and whether the evidence justified his conclusions.

1. Appeal dismissed. The claimant was entitled to relief from the sanction and to recover the additional liabilities. The claimant was awarded the costs of the appeal on the standard basis.
2. CPR Part 44.15(1) required a party seeking to recover an additional liability to provide information about the funding arrangement. CPR Part 44.3B(1)(c) imposed a sanction for failing to provide that information in accordance with the rules or practice direction. The notice requirements included the timing and content requirements in paragraphs 19.2 and 19.4 of the Costs Practice Direction.
3. Relief from sanction under CPR 3.9 should not be granted lightly. Procedural rules must be observed, and a party lacking a good explanation or whose default has caused prejudice will usually be refused relief. Nevertheless, the rules confer a discretion, and relief may properly be granted where the statutory and procedural factors have been considered.
4. The Master had sufficient material to infer that the claimant’s solicitors believed that the obligation to give notice arose when the funding arrangement commenced on 20 May 2005. The defective service and omissions were treated as inadvertent rather than intentional. That conclusion did not disclose an error of principle or any failure to take relevant matters into account.
5. The Master also had adequate material to assess prejudice. The defendants had placed no evidence before him showing how timely notice would have altered their conduct. Their suggestion that settlement negotiations might have taken a different course was vague, and the Master was entitled to find that no realistic prejudice had been established.
6. An appellate court should not reopen a discretionary decision unless the first-instance judge erred in principle, took account of an irrelevant matter, or failed to take account of a relevant matter. None of those grounds was established.

1. High Court (Chancery Division) — Master Gordon-Saker dismissed the appeal from the Costs Officer and granted relief from sanction on 24 May 2007.
2. High Court (Chancery Division) — The appeal was dismissed by Floyd J on 16 April 2008. The claimant was awarded the appeal costs on the standard basis.