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In Perryman Properties Ltd v Barker Shorten Architects LLP (2020), the Claimant applied for relief from sanctions in respect of its failure to provide information about funding arrangements in accordance with the Pre-Action Conduct Practice Direction in force before 1 April 2013.
In 2008, the Claimant was served an enforcement notice, by the local planning authority, for the construction of a building in London containing residential and commercial units. The Defendants (the architects) were retained in connection with the construction of the aforesaid building.
The Claimant appealed the notice and planning permission was granted. The Claimant alleged breach of duty by the Defendants in regard to planning permission compliance for the construction. In March 2013, the Claimant entered into a CFA with their solicitor and took out ATE insurance.
In accordance to the Practice Direction at the time, the Claimant was required to inform the Defendants about any funding arrangements within 7 days – the Claimant failed to notify the Defendants at this time due to an oversight by their Solicitor.
Settlement was not reached, and proceedings were eventually issued in 2020. It became apparent that the Claimant failed to notify the Defendants of the funding arrangements in place. As per CPR 44.3B (1)(c), pre 1 April 2013, the effect of failing to provide the requisite information regarding funding arrangements was that the party could not recover any additional liability for the period during which information about the funding arrangement was not provided (such as a CFA uplift or an insurance premium). Subsequently, the Claimant sought relief from sanctions in relation to the second instalment of the ATE premium, any future premiums and any future uplift under the CFA.
Mr Justice Fraser granted the Claimant relief from sanctions, after having applying the three-stage test in Denton v TH White Ltd  EWCA Civ 906. It was determined that the breach was serious or significant and, whilst the failure had not been remedied for some time, it was of a nature that might not be discovered for some time. In considering all the circumstances, the failure became evident not long after the issue of proceedings and thus the Defendants were not prejudiced. It was clear that since the pre-action process the Defendants intended to defend the claim. Relief from sanctions was therefore granted in respect of the second and future instalments of the ATE premium and the CFA uplift – subject to an undertaking by the Claimant to give the Defendants 42 days’ notice of any future increase of cover under the ATE policy.
This case stands as a reminder that the pre 2013 rules in relation to funding arrangements continue to be of significance. A&M Bacon Ltd are experts in this area and are here to help you with any of your costing needs. Contact us today on 01733 350 880.
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