Kerry Underwood


with 11 comments

In Springer (Personal Representative of The Estate of Wayne Anthony Springer (Deceased)) v University Hospitals of Leicester NHS Trust [2018] EWCA Civ 436

the Court of Appeal, in considering a second appeal against an order of a Deputy District Judge, dismissed the appeal against an order refusing the claimant relief from sanction following a failure to serve notice of funding in accordance with paragraph 9.3 of the old Practice Direction on Pre-Action Conduct.

This meant that the claimant could not recover the success fee under the conditional fee agreement for the period before notice was given and was also deprived of recovery of part of the After the Event insurance premium.

With limited exceptions, recovery of additional liabilities was abolished in relation to conditional fee agreements and After the Event insurance policies entered into on or after 1 April 2013, and thus this decision applies only to cases with pre–April 2013 funding arrangements, but this still covers a fair number of personal injury claims.

The decision will also be of relevance, albeit in relation to a different Practice Direction, where recoverability of additional liabilities remains, principally in mesothelioma cases, defamation and breach of privacy cases, and, in relation to clinical negligence cases, the After the Event insurance premium in relation to reports on causation and liability.


Paragraph 9.3 of the Practice Direction provided:


“Where a party enters into a funding arrangement within the meaning of rule 43.2(1)(k), that party should inform the other parties about this arrangement as soon as possible.”


This was effective from 1 April 2009 and prior to that there had been no requirement to inform the other parties “as soon as possible”.

Thus the decision is effective in relation to additional liabilities arrangements between 1 April 2009 and 31 March 2013 in relation to personal injury matters.

Just six months later, on 1 October 2009 the Practice Direction was changed yet again, and I set out the new paragraph 9.3 below, and it should be noted that the word “should” was replaced by the word “must”, which is mandatory and not just aspirational – see


Metcalfe v Clipson [2004] EWHC 9005 (Costs);




 Cullen v Chopra [2007] EWHC 90093 (Costs)

The new rule read:


“Where a party enters into a funding arrangement within the meaning of rule 43.2(1)(k), that party must inform the other parties about this arrangement as soon as possible and in any event either within 7 days of entering into the funding arrangement concerned or, where a claimant enters into a funding arrangement before sending a letter before claim, in the letter before claim.

(CPR rule 44.3B(1)(c) provides that a party may not recover certain additional costs where information about a funding arrangement was not provided.)”



CPR 44.3B(1) imposed a sanction on those who failed to provide funding information as required and for conditional fee agreements entered into on or after 1 October 2009, it provided, so far as is relevant:


“Unless the court orders otherwise, a party may not recover as an additional liability –

(c) any additional liability for any period during which that party failed to provide information about a funding arrangement in accordance with a rule, practice direction or court order…”.



All three courts which considered this matter, ending in the Court of Appeal, held that “as soon as possible” meant just that, although the courts accepted that the wording of the Practice Direction was poor and did not sit well with the original Civil Procedure (Amendment No 3) Rules 2000 as far as the sanction for failure to give notification was concerned.

Here there was a long delay in giving notice on Form N251 of the additional liabilities.

The facts are long and complicated and set out in full in the judgment, but the key point is that “as soon as possible” means just that.

The Court of Appeal pointed out that such a formula is not unusual, for example judicial review proceedings must be brought promptly, and in any event within three months.

At paragraph 61 of the judgment the Court of Appeal pointed out that the White Book is wrong in its analysis of paragraph 9.3 of the Practice Direction.

The White Book does not have a good record of getting the law in relation to funding arrangements and conditional fee agreements etc. correct.

At paragraph 63 of the judgment the Court of Appeal said that if it was not possible to identify all, or possibly any, of the proposed defendants then it would not be possible to notify those unknown defendants and thus the obligation to notify them under paragraph 9.3 will not arise until they are identified.

The second issue was whether the claimant should be granted relief from sanctions in relation to the now well-known principles in


Denton v TH White Limited [2014] EWCA Civ 906


For reasons set out in the judgment the Court of Appeal held that the three stage test in Denton meant that the claimant should not be granted relief from sanctions.

The key finding was that the NHS Trust had suffered significant prejudice as a result of the breach because it lost the opportunity of taking proactive steps towards investigating and resolving the potential claim over the two and a half year period during which additional liabilities were being incurred without their knowledge.

Written by kerryunderwood

April 10, 2018 at 9:12 am

Posted in Uncategorized

11 Responses

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  1. I’m glad the CA found against the solicitors. Trying to charge the NHS £116,000 in costs for a claim that settled for just £20k immediately after the Defence had been filed is outrageous.

    It’s cases like this where such naked greed is displayed by the solicitors that have both destroyed the public image of PI practitioners and killed the goose that laid the golden egg.

    Pro Bono

    April 10, 2018 at 11:43 am

    • Thanks for your comment. Any different views on this?



      April 10, 2018 at 12:58 pm

    • In ‘Meso’, cases where, due to the difficulty in diagnosis, and where the Exectutrix usually has to run the action, and where, generally, there are a number of Defendants. If the majority are on notice as to additional liabilities, and when the as yet unidentified Defendant insurer(s) (and subsequent solicitor agent(s)) become(s) the Lead handler, why can it not be inferred that they should be on deemed notice ? Indeed, why the need for such notice – given the imponderables and implicit difficulties in proving causation/identifying/resurrecting the numerous possible Defendants
      It does beg the question as to why, for example, a Claimant would proceed, otherwise by way of a CFA and ATE, along such an onerous and precarious (and potentially litigious) Claim, especially given the success fee is fixed, and the ATE premia are generally somewhat modest – can the Defendant really plead prejudice. What right minded Claimant would take the risk of pursuing the matter privately, it being most unlikely that a Legal expense insurer would roll up and raise a head above the parapet.

      nigel bennett

      July 6, 2018 at 4:01 pm

      • Nigel

        The key point is that a party facing recoverability of an additional liability, whether it be a success fee or an After-the-Event insurance premium, should be on notice.

        I see no objection with that in principle as it is an unusual risk, and of course has been abolished in all but mesothelioma cases and defamation and breach of privacy cases, and, as far as the ATE premiums are concerned, clinical negligence cases, but only part of the premium.

        In the case I reported, the claimant knew who the defendant was and had simply failed to inform the other party “as soon as possible” as required by the Practice Direction.

        In my view the Court of Appeal may take a different approach in the type of case that you are referring to, and you make the fair point that in a mesothelioma case the claimant is virtually always, if not always, going to be represented under a Conditional Fee Agreement with an associated After-the-Event insurance policy.

        I case I reported was a relief from sanctions case, as such cases will generally be, and the court has a wide discretion following the Court of Appeal’s own decision in

        Denton v TH White Limited [2014] EWCA Civ 906.

        Many thanks for your comment.



        August 29, 2018 at 11:16 am

  2. Thanks for your comment. Any different views on this?



    April 10, 2018 at 12:59 pm

  3. A bizarre decision.

    The DDJ found prejudice on the basis that the Trust would have been more pro-active had it been aware of the additional liabilities. Ignoring the fact that this amounts to pure speculation, surely compensators should proactively investigate claims irrespective of costs liabilities.

    With the benefit of hindsight, the Claimant’s solicitors probably could have been more proactive; however, I’m not convinced that their conduct was as damaging as the DDJ made out. I think it’s intetesting that the CoA felt it necessary to point out that this case was fact sensitive and not a precedent.


    June 3, 2018 at 1:00 pm

  4. Jonathan

    Recoverability was inherently wrong and flew in the face of all common law principles and was a relatively short-lived mistake, so it is unsurprising that the courts are taking a hard line.



    June 4, 2018 at 11:39 am

  5. Hi Kerry,
    I wonder if you can help me with a couple of questions concerning Mesothelioma claim with a CFA & ATE post 2013. I have read your recent (and now well-thumbed!) book (Kerry on QOCS s577 & Set Off) but I can’t find the answer! Maybe I overlooked it if so can you point me to the page number?

    1. If in communication with the Defendant is the Claimant STILL required to notify the Defendant/s of a post 2013 Meso CFA and inception of ATE policy within 7 days as per “old” rules?

    2. Meso claimants are still entitled to recover additional liabilities.. But I assume a Meso Claimant will not need ATE cover in respect of losing on liability if they benefit from QOCS? Surely, they only need cover for failing to beat Part 36 offers?

    3. How does a Defendant go about calculating what is a “reasonable” premium for a Meso Claimant which provides only protection for failing to beat a Part 36 offer on quantum?

    any pointers would be gratefully received. Thank you


    February 12, 2019 at 6:17 pm

    • Claire

      Very late reply – having a clear-up – but may help for the future,

      1. Not as far as I am aware – but definitely good practice to do so.
      2. Agreed
      3. Almost impossible to challenge an ATE premium see – my blog – Assessing Recoverable After- the event insurance premiums and proportionality generally.



      December 6, 2019 at 4:51 pm

  6. Late to this party. Surely in CN cases providing notice to a Trust before a LOC runs almost contrary to the protocol itself? It is not about racking up a s/f, it is about knowing if there is a case to advance. And the prejudice argument is speculative in the extreme and not borne out by my experience of CN cases. For a start, the D does not know the s/f level so it could 5% or 100% – if they do not know, how can there be a measurable ‘significant’ prejudice? If we follow the logic here, the D should take steps on being asked for medical records to investigate negligence, despite having no idea what case they are facing. This is ludicrous. Furthermore, from a practical standpoint, the existence of a s/f or ATE makes little to no difference to how the NHSR conducts itself. Ah well, it’s nice to see it take several years for the CoA to interpret a badly worded rule completely contrary to how it was commonly understood (i.e. LOC is the earliest mandatory point). Anyway, the point of my comment 12 months after the fact is to ask; does anyone know whether this is being appealed?

    Scott B.

    April 23, 2019 at 9:38 am

    • All of these issues applied throughout the period of recoverability in all matters. The reason that the claimant did not have to disclose the level of the success fee was that it would disclose the view of the claimant’s solicitors as to the prospects of the case. Obviously, now that recoverability of the success fee has been abolished in all but mesothelioma cases, that aspect is becoming of historical interest, but the ATE premium remains recoverable in part in clinical negligence cases, and in full in defamation and breach of privacy cases.



      July 15, 2019 at 6:42 pm

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