Manning & Anor v King's College Hospital NHS Trust

Relief from sanctions must be assessed by working through the factors in CPR 3.9 and then standing back to consider proportionality and the overriding objective. Uncertainty caused by a late application for relief is ordinarily a matter for costs, not a reason to withhold relief where the underlying breach caused no substantive prejudice. CPR 44.3B(1)(c) prevents recovery of the particular additional liability connected with the funding-information breach; it does not impose a blanket bar on unrelated liabilities. A success fee remains permissible where, properly construed against the factual background, the solicitor or counsel continued to bear a genuine risk of receiving no fees.

The claimants appealed decisions of Master Gordon-Saker in detailed assessment proceedings concerning conditional fee agreements and after-the-event insurance. The Master refused relief from sanctions for failure to notify the defendant of success fees in fresh CFAs entered into after the original claimant’s death, and consequently disallowed success fees for 17 months. He also disallowed an ATE premium incurred during that period. The defendant cross-appealed against the allowance of 100% success fees under the fresh CFAs, arguing that admissions meant there was no remaining risk. The appeal concerned the proper exercise of the relief discretion, the construction of CPR 44.3B, and the interpretation of the CFAs.

1. Relief from sanctions. The appeal against refusal of relief succeeded. The Master had found that the defendant suffered no prejudice in the substantive proceedings from the 17-month failure to notify the success fee. Any uncertainty affecting offers in the detailed assessment proceedings could have been compensated through costs. It was therefore wrong to treat that uncertainty as a reason to withhold relief. The resulting loss of £132,125 was disproportionate to the default. Full relief was required for the period in question.
2. ATE premium. The additional premium was recoverable. CPR 44.3B(1)(c), read with the words “as the case may be” in the definition of additional liability in CPR 43.2(1)(o), applied to the specific additional liability connected with the breach. It did not render every additional liability incurred during the period irrecoverable. The premium related to the ATE policy, in respect of which relief had been granted.
3. Success fees. The cross-appeal was dismissed. Applying the contractual interpretation principles in Investors Compensation Scheme Ltd v West Bromwich Building Society and the exceptional factual background, the fresh CFAs meant that success would be achieved only if the claimants succeeded on the issues tried and beat the £50,000 Part 36 offer. The solicitors and counsel therefore continued to bear a genuine risk of receiving no fees. The 100% success fees were reasonable under section 11 of the Costs Practice Direction.
4. The question of any further costs sanction arising from the late relief application was reserved for further submissions.

• Senior Court Costs Office: Master Gordon-Saker refused full relief from sanctions, disallowed specified success fees and the ATE premium, but allowed 100% success fees under the fresh CFAs.
• High Court (Queen’s Bench Division): The appeal was allowed on both grounds and the cross-appeal was dismissed. Further costs submissions were directed.