Springer v University Hospitals of Leicester NHS Trust

Paragraph 9.3 of the Practice Direction – Pre-Action Conduct required notification of a funding arrangement as soon as possible. That was a separate obligation from the seven-day or letter-before-claim long-stop. If a defendant could not yet be identified, the duty arose when the defendant became identifiable. The sanction under Civil Procedure Rules 1998, rule 44.3B(1), could be relieved only under the three-stage approach in Denton. Serious, unexplained delay causing the defendant to lose an opportunity for early investigation or settlement justified refusal of relief.

The appellant, acting as personal representative of the estate of Wayne Anthony Springer, pursued a clinical-negligence claim against the respondent NHS Trust. He entered into a first conditional fee agreement in June 2010, a second agreement in March 2012, and after-the-event insurance shortly afterwards. Notice of the funding arrangements was not given until September 2012, shortly before intended proceedings.

The claim later settled for £20,000. The appellant sought to recover success fees and the insurance premium, applying for relief from the sanction imposed by rule 44.3B(1) of the Civil Procedure Rules 1998. The Deputy District Judge refused relief, and Her Honour Judge Hampton dismissed the appeal. The issues were the construction of paragraph 9.3 and whether relief from sanction should be granted.

1. The appeal was dismissed. Lord Justice Hickinbottom delivered the judgment, with Lord Justice Lindblom and Lord Justice Moylan agreeing.
2. Paragraph 9.3 of the Practice Direction – Pre-Action Conduct imposed a discrete obligation to notify known parties of a funding arrangement as soon as the notifying party could. The phrase had its ordinary meaning and was not defined by the later words introducing the seven-day or letter-before-claim requirements. Those requirements were additional long-stop criteria. Compliance with a long-stop did not itself satisfy the prompt-notification obligation.
3. The court rejected the submission that the literal construction produced a procedural absurdity. The ordinary objective approach to subordinate legislation was supported by Black-Clawson International Limited v Papierwerke Waldhof-Aschaffenburg AG [1975] AC 591, R v Secretary of State for the Environment, Transport and the Regions ex parte Spath Holme Limited [2001] 2 AC 349 and Bogdanic v Secretary of State for the Home Department [2014] EWHC 2872 (QBD). Rectification by reading in or omitting words was permissible only for an obvious drafting error. No such error was established.
4. If a proposed defendant could not be identified when the arrangement was made, notification to that defendant could not be given and the obligation arose once the defendant became identifiable. On the evidence, the NHS Trust could have been identified substantially earlier.
5. Relief from sanction required the three stages in Mitchell v News Group Newspapers Limited [2013] EWCA Civ 1537 and Denton v TH White Limited [2014] EWCA Civ 906: seriousness and significance, the reason for default, and all the circumstances, with particular importance given to efficient and proportionate litigation and compliance with rules. The breach was serious and significant, no good reason was evidenced, and the NHS Trust lost a substantial opportunity to investigate, preserve evidence, negotiate, or pursue an early proportionate resolution. The lower courts were entitled to refuse relief.

• Court of Appeal (Civil Division) — dismissed the appeal against the refusal of relief from sanction: [2018] EWCA Civ 436.
• Leicester County Court — Her Honour Judge Hampton dismissed the appeal from the Deputy District Judge’s refusal of relief.
• Leicester County Court — Deputy District Judge Elmer refused relief from the sanction preventing recovery of the relevant success fees and after-the-event insurance premium.