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The recent decision in Ibbertson & Ibbertson v Black Horse Limited (2013), Unreported, Maidstone County Court - in which John M Hayes acted for Black Horse - provides further evidence of the continuing impact of the Jackson Reforms.
Mr and Mrs Ibbertson had issued proceedings against Black Horse for the alleged mis-sale of Payment Protection Insurance (‘PPI’). At trial, the Ibbertsons were awarded £1,131.19 in respect of the premiums paid and Black Horse was ordered to pay their costs of the Claim. The Ibbertsons’ solicitors, BlackLion Law LLP (“BlackLion”), thereafter served a bill totalling £41,136.36, inclusive of a 100% success fee and an ATE Premium in the amount of £15,900.00.
Points of Dispute were filed by Black Horse, which, inter alia, disputed the Ibbertsons’ entitlement to recovery of the success fee on the basis that no Notice of Funding had been served. BlackLion served Replies which included an assertion that notice had been given within the Letter of Claim, but no reference was made to a formal Notice of Funding being sent.
It was not until nearly a year later that an application was made for Relief from Sanctions pursuant to CPR 3.9. Witness evidence was provided in support of the same by Negar Yazdani, Principal of BlackLion, in which it was averred that the Notice of Funding had been sent to Black Horse and filed at Court. This represented quite a change in position from that as stated within the Replies to Points of Dispute.
A preliminary point which arose was whether the Ibbertsons’ application was to be judged in accordance with the old CPR 3.9 or the new amended provisions. Whilst the breach had occurred long before the implementation of the Jackson Reforms, the application, despite being dated 28th March 2013, was not received by the Court (or Black Horse) until after 1st April 2013. It was conceded by the Claimants that the new test should apply, and the Court was invited to determine the application by reference to the amended (and supposedly stricter) CPR 3.9.
DDJ Edgington went on to consider the submissions made by the parties. Upon reviewing the Court file it was noted that there was no record of a Notice of Funding having been received. Given that the Notice of Funding had not been received by either of its two intended recipients, the Court concluded that on the balance of probabilities that the letter had not in fact been sent.
Despite expressing concern regarding the sudden change in position from that detailed in the Replies, and further observing the “odd point” that “the size of the font and type face” of the letter adduced in support of the application seemed to be different to other correspondence sent by BlackLion, the Deputy District Judge concluded:
I do not go as far as saying that Miss Yazdani is telling lies. She is a solicitor or a member of a solicitor’s staff, a partner, and she wouldn’t tell lies or mislead. It may be that the letter was drafted but was failed to be posted. It is odd that she relies on assertions as to general processes.
Having therefore accepted that BlackLion had failed to comply with CPR 43-48 PD 19.2 (as it then stood), the Court then went on to consider the merits of the application for Relief in accordance with the amended CPR 3.9.
The Court concluded that the breach was “more fundamental” than BlackLion had suggested and that:
The prejudice was substantial bearing in mind the ATE Premium is extremely large and the recipient would be bound to ask questions about it.
Relief was refused accordingly.
This decision, made at County Court level, reflects the continuing implementation of the Jackson Reforms across the Judiciary. Lord Justice Jackson made it clear that “judges…are far too indulgent to litigants in default” and expressed his hope that “effective judicial training would promote a tough and more pro-active approach by Judges”. Writing in the Law Society Gazette, the President of Her Majesty’s Association of District Judges sent a clear message that Judges had been instructed to strictly enforce compliance with the Rules: the collateral damage caused by this strict approach is considered to be an appropriate price to pay in order to ensure the smoother running of the judicial system.
The fact that this message is now getting across is further evidenced by the subsequent decision in Boothroyd & Boothroyd v Nemo Personal Finance Limited & BCS Loans & Mortgages Limited (2013), Unreported, Croydon County Court, another case in which BlackLion was refused Relief in strikingly similar circumstances.
Whether the Ibbertsons would have been left to suffer for the mistakes of their solicitors under the old test is not clear, but what is clear is that litigants should now be under no illusion that in the event of default, they will be able to escape the consequences of such failures. This is not to say that Relief would never be granted in the appropriate circumstances, but what can be gleaned from the above decision is that where any such application prejudices the other party, Relief is unlikely to be granted.