England and Wales High Court (Senior Courts Costs Office) Decisions

IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE

		Royal Courts of Justice, Strand London, WC2A 2LL
		09/11/2016

Master Gordon-Saker :

1. This judgment sets out the reasons for my decisions on the following issues:

i) Hourly rates

ii) Success fees

iii) ATE premiums

iv) The applications for relief from sanctions by Mr Yentob and Mrs Horlick.

2. The hearing which commenced on 21^st September 2016 was listed for the determination of preliminary issues (hourly rates, success fees, ATE premiums and proportionality) on the detailed assessment of the Wave 1 Representative Claims and the Wave 1 Settled Claims and for the detailed assessment of the Wave 1 Common Costs bill. In the event, shortly before the hearing, the parties agreed the base costs of the Wave 1 Common Costs bill in the sum of £2,034,603 (as against the sum of £2,944,269 claimed) and the base costs of Ms Gulati, Mr Flitcroft, Ms Gibson and Mr Eriksson have also been agreed. What was left to be decided were the hourly rates for the remaining Wave 1 individual claims, the success fees for all of the Wave 1 individual claims and the ATE premiums for the Wave 1 individual claims. In addition Mr Yentob and Mrs Horlick applied for relief from sanctions in respect of their delay in serving notice of funding.

Phone hacking

3. It is likely that any reader of this judgment will have a good understanding of the phone hacking litigation and I need not summarise it here. The background is well summarised in the judgment of Mann J following the trial of the Wave 1 claims: Gulati & others v MGN Limited [2015] EWHC 1482 (Ch), published at:

http://www.bailii.org/ew/cases/EWHC/Ch/2015/1482.html

Hourly rates

4. Counsel's submissions on hourly rates followed their submissions on success fees and were relatively short. Both parties approached this issue broadly by reference to grades of fee earners, rather than by reference to individual firms or individual fee-earners, save in relation to Mr Heath of Atkins Thomson (and formerly of Taylor Hampton). I heard submissions on the appropriate rate for Mr Heath at the hearing on 4^th October 2016 and gave the reasons for my decision orally.
5. CPR 44.4 provides that in deciding whether costs are reasonable in amount the court will have regard to all the circumstances including (a) the conduct of the parties (b) the amount of any money involved (c) the importance of the matter to the parties (d) the complexity of the matter (e) the skill, effort, specialised knowledge and responsibility involved (f) the time spent (g) the place where the work was done and (h) the last approved or agreed budget.
6. The firms representing the Claimants were based in Central London, with the exception of Steel & Shamash, who were based near Waterloo, and Stewart-Moore who were based near Olympia. All of the firms specialise in media work. Stewart-Moore, who acted for Mrs Horlick, have for some of the work charged lower rates than the other firms. Steel & Shamash acted for Mr Gascoigne and Mr Yentob.
7. The Defendant contended that rates representing no more than modest increases on the guideline hourly rates for summary assessment should be allowed. Mr Carpenter, on behalf of the Defendant, pointed to the range of rates charged within firms for different clients and submitted that if a lower rate was reasonable for one client, it would be reasonable for all of that firm's clients in a similar case. He also pointed to the range of rates between the firms; solicitors doing similar work in broadly the same location.
8. Mr Carpenter submitted that the claims were not complex, either factually or legally; although he conceded that the assessment of damages in these cases involved novelty and created new law. Nor were they of significant value. The damages recovered fell within a range of £15,000 to £260,250. Mr Carpenter also relied on the involvement of counsel as relieving the responsibility assumed by the solicitors.
9. It is not in issue that it was reasonable for the Claimants to instruct the solicitors who were instructed – broadly Central London firms who specialise in media work. Nor is it in issue that this is not a case in which City rates would be justified.
10. Guideline hourly rates for summary assessment were last published in 2010. They provided a range of figures from £126 for a Grade D fee earner in Central London to £317 for a Grade A fee earner. The guideline rates are of course just that: broad approximations of what one might expect to see for "normal" work done by firms in the relevant geographical location.
11. I have no hesitation in concluding that, in the present case, rates higher than the guideline rates were reasonable. The passages in the judgments of Mann J following trial and Arden LJ on appeal relied on by Mr Browne QC, on behalf of the Claimants, are apt descriptions of the seriousness of these cases.

All this means that Mr Yentob's phone was hacked at least twice a day, and often several times a day, for a substantial part of a period of about 7 years, though perhaps for not the whole of that 7 years.  I expect the intensity rose as more and more people got used to the technique and its usefulness.  All aspects of his personal and business life were exposed because of the nature of his use of voicemail.  This is an enormous intrusion.  In those terms this is a serious case.  To this one adds the possibility of "farming" his other contacts, the extent of which it is impossible to determine.

per Mann J [2015] EWHC 1482 (Ch) para 243

Indeed, so far as I can see, there were no mitigating circumstances at all. The employees of MGN instead repeatedly engaged in disgraceful actions and ransacked the respondents' voicemail to produce in many cases demeaning articles about wholly innocent members of the public in order to create stories for MGN's newspapers. They appear to have been totally uncaring about the real distress and damage to relationships caused by their callous actions. There are numerous examples in the articles of the disclosure of private medical information, attendance at rehabilitation clinics, domestic violence, emotional calls to partners, details of plans for meeting friends and partners, finances and details of confidential employment negotiations, which the judge found could not have been made if the information had not been obtained by hacking or some other wrongful means. The disclosures were strikingly distressing to the respondents involved.

per Arden LJ [2015] EWCA Civ 1291 para 106

12. While the damages awarded or agreed were not at the top end for civil litigation, they were substantial and, in many cases, significantly more than the previous highest award in a privacy case. I also accept that these claims involved some complexity, not only in relation to quantum but also in relation to liability. Until liability was admitted, the Claimants faced the difficulty of proving the wrongs committed by the Defendant's employees with no clear evidence of precisely what had been done and when. The primary burden of the legal argument may lie with counsel, but the solicitors also have a role in analysing the evidence and formulating and communicating the case. I accept also that these claims required specialist skill, not only because of the nature of the case but also because of the nature of the opponent. The Defendant did not admit liability until late in the day and the claims were opposed, both on liability and quantum, with considerable force by a well-resourced party.
13. But to my mind the overwhelming factor in this case was the importance of this matter to the Claimants. For that, I need only refer back to the comments of Arden LJ.
14. It seems to me that some of the rates claimed are nevertheless too high. Taking into account all of the circumstances and based on my experience of comparable (though not similar) cases, in my judgment a reasonable rate for a Grade A fee earner undertaking this work would be £400. For a Grade B fee earner, £280 would be reasonable; £230 would be reasonable for a Grade C fee earner and £140 would be reasonable for the Grade D fee earners. They are the rates that I allow, save in the few instances where a lower rate has been claimed.

Success fees

15. Again the parties have adopted a broad brush approach. That was, if I may say so, very sensible as about 60 success fees fell to be assessed. Only one success fee was the subject of separate submissions: that of Taylor Hampton in the case of Miss Gibson. In relation to that, I preferred the submissions of the Defendant and allowed 50 per cent. I also heard argument as to whether success fees on work done before the conditional fee agreements were entered into should be recoverable.
16. In respect of the success fee percentages, the Defendant adopted what was described as an "algorithmic" approach. As illustrated in appendix 1A to Mr Carpenter's skeleton argument, the Defendant argued that the prospects of success fell into 4 bands. The bands reflected what the Defendant suggested were significant developments into the investigation of phone hacking.
17. For the first 4 cases (Ms Gulati, Mr Flitcroft, Ms Gibson and Mr Eriksson) the Defendant submitted that Taylor Hampton should have assessed the prospects of success at 65 per cent when they entered into their conditional fee agreements between August 2011 and August 2012. In respect of the conditional fee agreements entered into between March 2013 and June 2013 the prospects of success should have been assessed at 70 per cent. From September 2013 until the Defendant conceded liability, the prospects of success should have been assessed at 75 per cent. In respect of the 4 agreements entered into by Mr Reed in January 2015, the Defendant contended that the prospects of success should have been put at 85 per cent. To the resulting arithmetical success fee the Defendant suggested adjustments to reflect the definitions of "win" in the individual conditional fee agreements, whether there was a Part 36 risk and whether the success fees were staged.

Success fees – Taylor Hampton's success fees to February 2013

18. In respect of the first band (August 2011 to August 2012) Mr Carpenter relied on the Particulars of Claim in the claim by Ms Gulati as indicating, at paragraphs 5(a) to (k) and (r) together with the confidential third schedule, what was known to the Claimants' solicitors at the time of entering into the agreements. However it seems to me that this amounts to nothing more than that there had been a practice among some journalists of hacking phones. The only evidence that the phones of any of the first 4 claimants had been hacked was in the confidential third schedule. A reporter employed by one of the Defendant's newspapers had said in a statement in employment tribunal proceedings that the phone of Ms Gibson had been hacked. But there was no indication of who had done it or how he knew about it. The first schedule to the Particulars of Claim set out the cases of the first 4 claimants as to what had been published by the Defendant's newspapers and why they believed or inferred that information must have been obtained from hacking their phones. The schedule does not contain any direct evidence that the phones of any of the Claimants had been hacked or that the stories published derived from any hacking of the Claimant's phones. Clearly there were good grounds for suspicion, but that is not the same as evidence.
19. In response, Mr Browne QC took me through the public denials of phone hacking made by the Defendant: in the press in October 2011 and before the Leveson Inquiry in January 2012. Even in 2013 Mr Vickers, an officer of the Defendant, told a Parliamentary Select Committee that:

… some of our current journalists have recently been arrested on charges that relate to phone hacking. We have done huge investigations and, to date, we have not found any proof that phone hacking took place.

20. In February 2013 the Defendant applied for summary judgment in the cases of Ms Gibson and Mr Flitcroft and to strike out parts of the Particulars of Claim in each of the first 4 claims. The application was unsuccessful but was not heard until October 2013 (with judgment in November 2013).
21. I have no hesitation in concluding that Taylor Hampton, who acted for these 4 Claimants, could reasonably have assessed the prospects of success at no more than 50 per cent. These Claimants may well have had reasonable cause to suspect that their phones had been hacked, but they had no evidence of that.
22. The conditional fee agreements of Mr Eriksson and Ms Gulati contained no Part 36 risk, but the agreements of Ms Gibson and Mr Flitcroft did. The success fees in the agreements of Mr Eriksson, Mr Flitcroft and Ms Gibson were staged. The success fee in the agreement of Ms Gulati was not. It seems to me that these cases were so risky that no reduction should reasonably have been made from the success fees where there was no Part 36 risk nor where the success fee was not staged.
23. The definition of "win" in the conditional fee agreements entered into by Mr Eriksson, Ms Gulati and Mr Flitcroft are in a very common form: "Your claim for damages is finally decided in your favour, whether by a Court decision or an agreement to pay you damages or in any way that you derive benefit from pursuing the claim". The definition in Ms Gibson's agreement contained a further proviso that for a "win" she would have to recover damages above a certain level, a statement in open court or an injunction. It seems to me that none of these definitions affected the reasonable assessment of the risk.
24. Accordingly in my judgment a success fee of 100 per cent was reasonable in each of these cases.
25. Ms Gibson's agreement provided for staged success fees:

…

3. 50% if the claim settles after the service of the first Defence served by an opponent.

4. 75% if the claim settles after the exchange of witness statements.

5. 100% if the claim settles on a date after 45 days before the trial window, or on a date after 45 days before the first day listed for trial (whichever is sooner), or if the claim proceeds to trial save when a hearing of preliminary issues is directed which is capable of determining the claim. In such an instance, the success fee is set at the percentage specified by stage 5 above of basic charges if the claim settles on a date after 45 days before the first day listed for any such hearing or if the claim proceeds to a hearing of preliminary issues which are capable of determining the claim.

26. It is common ground that Ms Gibson's claim was settled after service of the defence but before exchange of witness statements. The Defendant therefore contends for a success fee of 50% (stage 3). However Ms Gibson contends for a success fee of 100%, under stage 5. Mr Browne QC argued that the Defendant's application to strike out Ms Gibson's claim was "a hearing of preliminary issues [which had been] directed [and] which [was] capable of determining the claim". The claim settled after the hearing of that application.
27. If the Defendant's application had succeeded, Ms Gibson's claim would have been determined. But it would be difficult to categorise the hearing of such an application as the hearing of a preliminary issue, just as it would be difficult so to categorise an application by a claimant for judgment in default or summary judgment, even though either might result in the determination of the claim.
28. On any view the hearing of the Defendant's application was not directed. It seems to me that the words "when a hearing of preliminary issues is directed which is capable of determining the claim" are obviously intended to describe the situation where the court has directed pursuant to CPR 3.1(2)(i) that there should be a separate trial of an issue and the determination of that issue is capable of determining the claim.
29. Accordingly in my judgment stage 5 was not engaged and the solicitors' success fee in relation to Ms Gibson's claim cannot be more than 50%.

Success fees –February 2013 to September 2013

30. On 26^th February 2013 the Defendant issued an application to strike out the whole of the claims of Mr Flitcroft and Ms Gibson and the "generic case" pleaded in the first 4 claims. The Claimants' opposition to the application was articulated first in the third witness statement of Mr Heath, their solicitor, dated 17^th April 2013. Given that the purpose of the statement was to argue the Claimants' case I should not treat it as an impartial analysis of the merits, but it does provide a snapshot of what was known to the Claimants' solicitors in early 2013.
31. The statement referred to the recent arrests of a number of journalists who had worked for the Defendant and a statement released by Scotland Yard on 14^th March 2013 that the police were investigating a suspected conspiracy to intercept telephones at the Mirror Group. At paragraph 14 Mr Heath reported that he had been told by the police that they were "holding evidence that could relate to the [Claimants'] claims as well as other potential claims" that Mr Heath's firm was currently investigating. Mr Heath added:

I have been told by DI Setter that Ms Gulati, Mr Day and Mrs Benjamin are all mentioned in a hacking context in relation to the Sunday Mirror with regards to the material Operation Golding currently hold.

32. At paragraph 17 Mr Heath explained that the police held an unspecified document which identified the victims of phone hacking and also the contact list of "Journalist G" who had worked for both News Group Newspapers and the Defendant. Entries in that list and/or Journalist G's palm pilot tied in with articles in the Sunday Mirror. Two entries in the palm pilot were the mobile phone numbers of Ms Gulati and Mr Eriksson.
33. The fact that employees of the Defendant held the mobile phone numbers of some of the Claimants does not of course establish that their phones were hacked successfully.
34. However, while the individual claims remained inferential, it seems to me the fact that the police had started an investigation into phone hacking by journalists employed by the Defendant should reasonably have affected any risk assessment made thereafter. In relation to each individual claimant these remained risky cases. However the strengthening of the generic case against the Defendant increased the likelihood of the inferential case raised by each new claimant. In my judgment a reasonable assessment of the prospects of success from 2013 onwards would have been better than 50 per cent. I would put it at 60 per cent, giving rise to a success fee of 67 per cent subject to 2 adjustments.
35. In arriving at 60 per cent, I have taken no account of those claimants who agreed staged success fees nor of any particular Part 36 risks assumed by the lawyers. These factors should I think be reflected in an upward adjustment to the success fee allowed where they are applicable.
36. In KU v Liverpool City Council [2005] 1 WLR 2657 Lord Justice Brooke said that "this type of arrangement (staged success fees) would lead to a greater chance of establishing the reasonableness of a higher success fee given that the claim did not settle within the agreed period (that is, an earlier stage)". It seems to me that in those cases where the Claimants' solicitors have adopted a staged success fee they can justify a higher success fee where the claim has not settled in the earlier stages. Different stages have been agreed across the range of conditional fee agreements. However the parties have sensibly adopted a broad approach to this. The Defendant, in arriving at the success fees offered, has adopted an across the board increase of 10 per cent. It has to be a matter of impression but I think that is too much. The principal factor in assessing the reasonableness of a success fee must be the risk at the time that the agreement was entered. The kindlier eye with which the court will look at staged success fees is unlikely to lead to a substantial difference. In my view the reasonable success fees in the post-2013 claims where the success fee was staged would be the otherwise reasonable success fee of 67 per cent plus a further 5 per cent.
37. I would adopt a similarly broad approach in relation to cases where the solicitors or counsel had assumed a Part 36 risk. The Defendant's approach to this was to suggest a deduction of 5 per cent from the success fee in those cases where the lawyers had no Part 36 risk. Again the Part 36 risk varies between the agreements. It seems to me that where there is no specific Part 36 risk but the agreement is a "CFA lite", that is that the client will not be liable for costs which are not recovered from the Defendant, that should be treated in the same way as a Part 36 risk. In my judgment the significant risks in these cases were on liability rather than quantum and any Part 36 risk, as at the dates when these agreements were entered into, should not have been a substantial factor. In my view the reasonable success fees in the post-2013 claims where there was a Part 36 risk or similar would be the otherwise reasonable success fee of 67 per cent plus a further 3 per cent (together with the further 5 per cent if the success fees were staged).

Success fees – September 2013 to September 2014

38. The Defendant contended that a lower success fee should be allowed in cases where the conditional fee agreement was entered into in or after September 2013. The principal factor relied on is that on 10^th September 2013 Mr Dan Evans (Journalist G) pleaded guilty to charges in respect of phone hacking while employed by the Defendant. In December 2013 Mr Evans' police transcripts were disclosed to the parties and he gave evidence at the trial of his co-defendants in January 2014. I am told that he admitted that he had hacked phones while in the employment of the Defendant. The trial concluded in June 2014 and in July 2014 Mr Evans was given a suspended sentence. On 24^th September 2014 the Defendant made admissions in these proceedings.
39. On behalf of the Claimants Mr Browne QC submitted that while Mr Evans' guilty plea was a notable event it did not assist with establishing the claim of any particular Claimant. I have not been shown anything to suggest that Mr Evans' guilty plea related to the phone hacking of any particular Claimants. Indeed the statement issued by the Crown Prosecution Service on 3^rd September 2013 which set out the charges, would suggest not. I was not taken to Mr Evans' police transcripts nor any statements that he made to the police and so there is nothing before me to indicate that these documents would have enabled the Claimants' lawyers to reach a more optimistic view of the merits of any individual Claimant's case. Mr Carpenter accepted that the police disclosed material only to those who had already become claimants and he relied on this disclosure only as part of the increasing body of evidence that phones were being hacked. That is not, it seems to me, sufficient to affect a risk assessment in relation to any particular Claimant. Accordingly the reasonable assessment of the risks after September 2013 would be similar to that before.

Success fees after September 2014

40. Only 4 conditional fee agreements were entered into after the Defendant had made admissions: those of Mr Reed of counsel in the cases of Ms Alcorn, Mr Ashworth, Ms Frost and Mr Gascoigne.
41. The risk which counsel assumed was the risk of failing to beat a Part 36 offer. Except in the case of Ms Alcorn, Mr Reed assessed the prospects of beating the Part 36 offers at 60 per cent, but the agreements provided for success fees of 75 per cent. In the case of Ms Alcorn it would appear that Mr Reed put the prospects of success at 50 per cent.
42. In the course of submissions Mr Carpenter conceded success fees of 67 per cent (and 75 per cent in the case of Ms Alcorn) subject to confirmation that Mr Reed had not given contradictory advice on the prospects to his clients. That confirmation was given by Mr Browne QC.
43. Accordingly I would allow 67 per cent, save in the case of Ms Alcorn where the success fee should be 75 per cent.

Definitions of "win"

44. The Defendant contended that the broad definitions of success in the conditional fee agreements should be reflected in the percentages allowed for the success fees. The different definitions are helpfully set out in Appendix 1C to Mr Carpenter's skeleton argument.
45. In the course of oral submissions Mr Carpenter accepted that the definitions adopted by Atkins Thomson and Lee & Thompson were "pretty standard" and so he took no point in relation to them. However the agreement between Clintons and Mr André defined success as either "a final decision … in your favour" or "the claim being settled on … terms approved and agreed by you". Mr Carpenter argued that any settlement, even a drop-hands settlement, would entitle the solicitors to their base costs and a success fee. He identified also the conditional fee agreements entered into by Hamlins, Steel & Shamash, Stewart-Moore and Taylor Hampton as having been drafted in such a way as to entitle the solicitors to a success fee provided only that a costs order was made in the client's favour.
46. However it seems to me that these are not factors which should serve to reduce the success fee which would otherwise be reasonable. In the case of Clintons, the agreements were "CFA lites", that is that the clients would be liable to pay their lawyers' fees only to the extent that the opponent was either liable to pay or had paid the costs.
47. In those cases where it is said that even an interlocutory order for costs would entitle the solicitors to payment of their costs in full, one must I think have regard to the reality of the situation. No solicitor could reasonably ask his client to pay the full base costs and a success fee simply because along the way the client had been awarded some interlocutory costs while losing the case. As between the solicitor and the client it seems to me that the client would have compelling arguments that the agreement should be construed narrowly so that only a final costs order in the client's favour would be sufficient to entitle the solicitor to the costs of the claim. Generally the client would be entitled to a final costs order only where he or she had been awarded substantial relief.

Success fees - Common costs counsel

48. The counsel who were acting in relation to the individual claims together with Mr Browne QC entered into separate conditional fee agreements in relation to the common costs. Mr Browne explained that the reason for this was so that counsel could be instructed by the lead solicitor on common costs matters.
49. The agreements were dated 5^th September 2014, shortly before the Defendant's admission of liability (24^th September 2014). The agreements provided for success fees of 100 per cent.
50. The Claimants would each be liable for a share of the common costs. So if there were 10 claimants and 1 lost, counsel would be entitled to 9/10^ths of the whole and so would lose 10 per cent. It seems to me that the same risk assessment ought reasonably to have been made in relation to these agreements as was made in the individual claims assessed in this period, namely 67 per cent, to which should be added 3 per cent as the lead solicitor's liability to counsel is limited to the extent that the fees are recovered from the opponent.

Retrospective success fees

51. The Defendant objected to paying success fees on work which had been done before the conditional fee agreements had been entered into but which was covered by those agreements because they were of retrospective effect. Counsel's submissions on this issue, both written and oral, were very short.
52. Mr Carpenter relied on Kellar v Williams [2004] UKPC 30 as authority for the proposition that a party may not recover costs attributable to an increase in its liability to its lawyers created after the order entitling it to costs. Clearly a party who has retained solicitors on a conventional basis cannot hope to recover additional costs by converting to a retrospective conditional fee agreement after he has a costs order in his favour.
53. But that was not the position in this case. All of the conditional fee agreements were entered into before the Defendant was ordered to pay the Claimants' costs. Over the course of the hearing Mr Carpenter produced a schedule of the retrospective success fees claimed. They vary significantly both in amount and period. Some of the periods are very long, nearly 3 years, but the amounts claimed on work done in those longer periods are very modest. The largest retrospective success fees claimed, £70,185.33 and £34,500, are claimed in respect of the work done by Mr Reed and Mr Sherborne in respect of common costs over 3 and 10 months respectively. Both counsel were instructed on behalf of the individual Claimants and, had they not entered into conditional fee agreements specifically in relation to common costs, would doubtless have sought payment for this work under the individual conditional fee agreements to which they were party.
54. In JN Dairies Ltd v Johal Dairies Ltd [2011] EWHC 90211 (Costs) the Claimant's solicitors moved from a conventional retainer to a retrospective conditional fee agreement shortly before the hearing of an appeal. I concluded that while it may have been reasonable as between the solicitor and client to enter into an arrangement which was effectively "double or quits" it was not reasonable as between the parties to double the losing party's liability so late in the day.
55. That also is very different to the present case. There is nothing to suggest that there were any conventional retainers in place before the conditional fee agreements were entered into. All of the Claimants pursued their claims under conditional fee agreements and the Defendant was aware of that. The vast bulk of the retrospective success fees claimed relate to the fees of counsel rather than the solicitors. There was no obligation to give notice of funding in respect of conditional fee agreements entered into with counsel if notice of funding had been given in relation to an earlier conditional fee agreement with the solicitor (Costs Practice Direction, as in force before 1^st April 2013, para 19.3(2)(a)).
56. In my experience it is almost invariably the case that work will be done in anticipation of a conditional fee agreement being entered into and without a formal conventional retainer being in place. While some of the periods over which the retrospective success fees are being claimed are surprisingly long this is not a case of a party unreasonably creating a different liability for costs after the event. There is nothing to suggest that a different kind of retainer was ever envisaged.
57. Accordingly in principle success fees should be recoverable in respect of work done before the conditional fee agreements were entered into.

ATE Premiums

58. Before the hearing the Defendant made a number of concessions in relation to the after the event insurance premiums. What remained in issue was:

i) In the cases of Mr Ashworth, Ms Frost and Ms Alcorn the Defendant contended that the staging of the premiums was unreasonable. Proceedings were issued with no letter of claim having been sent and so the Defendant had no opportunity of settling the claim at stage (ai). Those claims went to trial but the staging was such that the policy moved too quickly into the final stage.

ii) A similar point was made in relation to the cases of Ms Noble and Mrs Horlick, but their claims settled before trial at stage (bi).

iii) In relation to Mr Flitcroft and Mr Eriksson, the Defendant questioned why the Claimants had purchased an ATE policy with Temple only to replace it with another policy with Temple. Only the premiums under the second policies were claimed but by the time that the second policies were purchased the initial stages of the premium had elapsed.

59. All of the Claimants purchased "Temple Litigation Advantage" policies from Temple Legal Protection Limited. The assertion by Mr Browne QC that this was the only policy available for this type of case was not challenged and the Defendant did not put forward any alternative policy that was available at the relevant time.
60. Very briefly, by reference to the policy purchased by Mr Ashworth, the policy provided for 7 stages of premium and a limit of indemnity throughout of £100,000 plus the premium. Premium (ai), £1,850 plus tax, would be payable if the claim settled within the pre-action protocol period. The final premium (ciii), £82,500 plus tax, would be payable if the claim proceeded to judgment. Mr Ashworth's claim went to judgment and so the final stage premium (£87,450 including tax) is claimed.
61. The difficulty with the Defendant's argument, as Mr Browne pointed out, is that it did not argue that the claims were issued prematurely and it could not argue that the claims would have been settled earlier had they been notified earlier. In short the Defendant was not denied the opportunity to settle these claims at an earlier stage of the policies, because it chose to defend the claims on liability until September 2014 and then chose to take the representative claims to trial on quantum.
62. There is nothing to enable me to conclude that these policies were purchased unreasonably nor that the premiums were staged unreasonably. Accordingly the premiums must be allowed as claimed.

Relief from sanctions

63. Applications for relief from sanctions were made by Mrs Horlick and Mr Yentob. It is convenient to take them together.
64. In the case of Mrs Horlick her solicitors gave notice of funding in relation to the ATE policy on 10^th September 2014, the day after the policy was purchased, but failed to give notice of funding in relation to the conditional fee agreement with her solicitors until 20^th November 2014. The agreement had been entered into on 24^th June 2014 and proceedings were issued on 13^th August 2014. Paragraph 19.2(1)(b) of the Costs Practice Direction in force before 1^st April 2013 (which continues to apply by virtue of CPR 48.1(1)) provided that a party who enters into a funding arrangement before proceedings must give notice of funding when he issues the claim form. CPR 44.3B(1)(c), as in force before 1^st April 2013, provided that a party may not recover an additional liability for any period during which he failed to provide information about a funding arrangement in accordance with a practice direction, unless the court orders otherwise.
65. In support of Mrs Horlick's application it is said that the Defendant was aware at the material time that all of the Claimants were pursuing the claims under conditional fee agreements and a number of examples evidencing that knowledge are quoted in the application.
66. In the case of Mr Yentob, a conditional fee agreement was entered into on 30^th September 2013. The letter of claim was sent on 18^th March 2014 but notice of funding was not given until 17^th April 2014. Paragraph 9.3 of the Practice Direction – Pre-action conduct and Protocols provided that a party must inform any other party as soon as possible about a funding arrangement entered into before the start of proceedings. Again the Claimant relies on the Defendant's knowledge that all of the Claimants were using conditional fee agreements to finance their claims.
67. The sanction imposed by CPR 44.3B is automatic. It can be disapplied only by an order of the court. On behalf of the Claimants Mr Browne QC submitted that neither default was serious nor significant, he accepted that there was no good reason for either default, but submitted that having regard to all the circumstances it would be just to grant relief.
68. These were specific rules which required a party who had entered into funding arrangements to give notice of those arrangements to the other party. The reason for that is obvious: the funding arrangements may well have a significant impact on the amount of that other party's liability for costs. These rules were well understood. Notice had to be given at the earliest opportunity if the arrangements were entered into before the start of proceedings and, otherwise, when proceedings were issued. It seems to me that a failure to give the required notice must always be serious and significant unless it is given within a very short time after the time at which it should be given. Having regard to the requirements of the rules generally a failure to serve a document until one month or 3 months after it should have been served is not likely to be treated as insignificant, particularly where the rules provide for an automatic sanction for default.
69. The failures to give notice in time would appear to have been the result of oversight and no good reason for the failures was advanced.
70. Having regard to all the circumstances these failures have not prevented the parties from conducting the litigation efficiently or at proportionate cost but nor would the interests of justice be imperilled if relief were not granted. The Claimants would not be denied access to justice. This is a case where the sanction is proportionate to the breach. If relief is not granted the solicitors would be denied success fees on the value of their work done over the one and 3 month periods respectively. The Claimants would still be entitled to their reasonable and proportionate base costs for work reasonably done over those periods. The sums lost are likely to be relatively insignificant. Because of the failure to comply with the practice directions, court time and the parties' resources have been spent on an application to disapply the sanction.
71. Accordingly the applications for relief from sanctions are refused.