Kerry Underwood


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I am currently on my Autumn Tour on the extension of fixed costs as proposed by Lord Justice Jackson and associated matters until Monday 16 October and these will be my only courses on this subject until at least September 2018.

You can book here.

All of these matters are dealt with in my new book – Personal Injury Small Claims, Portals and Fixed Costs, running to three volumes and 1,300 pages and costing £80.00 and available from me here or Amazon here.

In Casehub Ltd v Wolf Cola Ltd [2017] EWHC 1169 (Ch)

the Chancery Division of the High Court had a rare opportunity to consider the current state of the law in relation to maintenance and champerty, and pointed out that as these concepts are ones of public policy, the law must be kept under review as public policy changes.

The High Court rejected the Defendant’s submission that the Claimant company bringing claims assigned to it by purchase amounted to champerty and maintenance.

It also held that the cancellation fees in the contract between the individual consumers and the Defendant were part of the price payable under those contracts and were therefore exempt from assessment as to their fairness under the Consumer Rights Act 2015.

The Claimant is a company which builds consumer group actions online by entering into claim purchase agreements whereby it takes an assignment of consumers’ claims to recover money alleged to have been unlawfully charged by third parties.

It then aggregates the claims into a single portfolio and, once that portfolio reaches a certain threshold, brings a claim in its own name against the third party.

The Defendant sells service based to business and individuals and charges £20.00 a month for a minimum fixed term of 12 months and if a customer terminates its agreement within that term, a cancelation fee is payable amounting to the rest of the term less the 10% discount which is said to reflect the fact that the customer is paying early.

The system did not work and the customers terminated their agreement within the first month and were charged the whole sum, less the 10% discount.

One form of agreement between the claimant and the consumers was a 40% contingency fee, payable only in the event of recovery of the money and another form was a flat fee of £40.00, payable in any event with the consumers receiving everything else if recovery was achieved.

The Defendant submitted that:

(1)          the assignment is of a bare cause of action and, as such, is champertous;

(2)          the assignment is not conducive to the administration of justice;

(3)          the Claimant has taken too much in damages;

(4)          the assignment of a claim which does not exist and which may never exist is not possible; and

(5)          the Claimant has not taken an assignment of the whole of the claim.

The Claimant submitted that:

(1)          the assignment is not champertous and does not fall foul of the rule against maintenance;

(2)          the scope of the rules against champerty and maintenance is not to be extended;

(3)          public policy is in favour of upholding the assignment;

(4)          EU law requires that national rules do not interfere with the exercise of EU rights;

(5)          the rules against champerty and maintenance are inconsistent with both the assignor’s and the claimant’s right to property and thus inconsistent with Article1 of Protocol 1 of the European Convention on Human Rights (“ECHR”); and

(6)          it is not open to the defendant to invoke the law on champerty and maintenance.

The High Court then reviewed the law and cases in relation to champerty and maintenance (Paragraphs 15 to 26).

Taking into account all aspects of the claims purchase agreements between the Claimant and the individual consumers, there was no “wanton and officious meddling” by the Claimant in the dispute between the consumers and the Defendant.

The Claimant had a legitimate and genuine commercial interest in being able to pursue the restitutionary claims assigned to it, in order to protect certain liquidated sums that it had acquired under the agreement.

This is the first English and Welsh authority holding at the assignment of a restitutionary claim for money had and received is not an assignment of a bare cause of action liable to offend the rules on maintenance and champerty.

This is the case even where liability is disputed.

The High Court also held that there was strong public policy grounds in favour of upholding the assignment, including the fact that the claims were small and, arguably, not worth pursuing on their own, and therefore the assignment enhanced access to justice for the consumer.

Here, the assignment redressed the inequality of arms between the defendant and the individual customers.

The Defendant’s argument that there were alternative means of enabling the customers to pursue their claims, for example by third party financing or with “No Win, No Fee” Agreements was not logical as it did not follow from that that other alternative arrangements should be prevented.

The courts recognise the need for innovative but responsible ways for increasing access to justice for those who could not otherwise afford it.

The court also held that the Claimant was not providing legal services within the meaning of Section 13 of the Legal Services Act 2007, but rather was acting in its capacity as a litigant seeking to enforce its assigned right to recover the charges in question.

Neither did the assignment allow the Claimant to get round the rules on costs as the Claimant could be made the subject of an adverse Costs Order and could be ordered to provide security for the Defendant’s costs in circumstances where an individual customer would not be ordered to provide security.

The High Court found that a charging of a 40% fee was lawful and reasonable, although it noted that in these cases the customer had the option of paying 40% of the total sum recovered or paying a fixed fee.

The Defendant also submitted that the representative action provisions in CPR 19.6 are not available to the Claimant in circumstances where the class members have entered into separate, but identical, contracts and may have lost different, but ascertainable amounts.

CPR 19.6 reads:

Representative parties with same interest

19.6 (1) Where more than one person has the same interest in a claim –

(a) the claim may be begun; or

(b) the court may order that the claim be continued,

by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest.


In fact, the court held here that it was not a representative action as the Claimant is bringing one claim in its own name.

The court declined to rule on what the position would be had the Claimants been bringing these claims together through, for example, a solicitor.

The Consumer Rights Act 2015 implements the Unfair Contract Terms Directive (93/13/EEC).

The High Court was bound to follow the decision of the Supreme Court in

Office of Fair Trading v Abbey National plc and others [2009] UKSC 6

and declined to discuss whether subsequent decisions of the European Court of Justice require a different interpretation.

It will require a further case to come before the Supreme Court before there is a substantive review of the law in this field.


A welcome and sensible decision. It is about time that the concept of champerty and maintenance, along with the Indemnity Principle, finally killed off.

The decision is also interesting in that it upholds a 40% deduction from damages, which is of course precisely the sum I advise under the Underwoods Method in personal injury and other cases.

Written by kerryunderwood

September 27, 2017 at 10:30 am

Posted in Uncategorized

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