Pre-Issue Notice of Funding

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A case recently reported on the SCCO web-site has reiterated the point that where a pre action protocol states that a party should give notice to other potential parties to an action when entering into a funding arrangement this does not create an absolute requirement which would mean that the success fee was not recoverable for any period during which notice had not been given. 

In Cullen and Anor v Chopra the Defendant sought to argue that the claimant should not be permitted to recover a success fee on her costs until the time when the defendant had received notice that the claim was being funded by a CFA with a success fee. 

The CFA had been signed on 25th January 2005 and notice of the CFA and success fee was given in the letter of claim on 8th September 2005.  The Defendant contended that no success fee was payable for that period.  Master Campbell rejected that submission and followed his earlier decision in Metcalfe v Clipston where he had commented that:-

"For Miss Ward to succeed, I consider the obligation on the receiving party to give notification of funding pre issue must be absolute but in my judgment, the word "should" in the PDP does not impose such an obligation. On the contrary, I would construe "should" as meaning "ought to" which is not the same as "has to" or "must"...

"The PDP at paragraph 4.A.1 is of no assistance either because the requirement to provide information is optional not compulsory."

Accordingly the Claimant was permitted to recover a success fee on her costs from the date that the CFA was signed.

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Andrew
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