Relief from CFA sanctions

Grupo Torras SA and another v Al-Sabah and others (QBD [2003] All ER (D) 339)

Section 32.4 of the Costs Practice Direction provides that if a detailed assessment is in respect of an additional liability only, the receiving party must serve on the paying party and all other relevant persons:‘… (c) the relevant details of the additional liability’, which, in respect of a CFA with a success fee, s32.5(1)(b) defines as:‘a statement of the reasons for the percentage increase in accordance with regulation 3(1)(a) of the Conditional Fee Agreements Regulations …’ CPR rule 44.3B provides that a party may not recover as an additional liability any percentage increase where he has failed to comply with a requirement in the Costs Practice Direction. The receiving party was concerned that if the reasons for the uplift were disclosed, that information might well be leaked to those concerned in a criminal investigation in Kuwait. Accordingly, they sought the protection of a specific court order limiting any disclosure to a named solicitor acting for the respondents, counsel and the cost draftsman instructed. They also asked for relief from the sanctions contained in rule 44.3B. The Court agreed with the paying party’s contention that a court order was unnecessary because not only would the information be subject to an implied undertaking that it would not be used for a collateral purpose, they were also willing to give an express undertaking not to use the information for any purpose other than the proceedings. The Court did however, exercise its jurisdiction under CPR rule 3.9 to give relief from the sanction imposed by rule 44.3B, on condition that the receiving party made disclosure within 10 days.