Common sense prevails in BNM…

The long awaited Judgment of BNM v MGN [2017] EWCA Civ 1767 has finally been handed down.

As we envisaged, the Court of Appeal have held that Master Gorder-Saker was wrong to have adjudged that “when applying the new test of proportionality, the court need not consider the amount of any additional liability separately from the base costs”. 

In light of the express transitional provision dealing specifically with this issue, one wonders why this dispute has even arisen. CPR 48.1 (1) states:

“The provision of CPR parts 43 to 48 relating to funding arrangements, and the attendant provisions of the Costs Practice Direction, will apply in relation to a pre-commencement funding arrangement as they were in force immediately before 1 April 2013, with such modifications (if any) as may be made by a practice direction on or after that date”.

Master Brown, echoing the sentiments of Master Rowley stated, in the case of Murrells v Cambridge University NHS Foundation Trust, that if the test did apply to additional liabilities it would have “a considerable prejudicial effect upon those litigants and lawyers who have entered into pre-commencement funding arrangements”. He stated that “the Defendant’s contention cannot be reconciled with transitional provisions and the clear will of parliament”.

It is, therefore, not a surprise that the Court of Appeal has unanimously held that the transitional provisions in CPR 48.1(1), together with the amended definition of “costs” which, since 1 April 2013, now excludes any reference to “additional liability incurred under a funding arrangement”, act to support and safeguard the former costs rules.

The other, perhaps less eagerly anticipated, decision regarding the Claimant’s decision to issue proceedings without any prior warning or contact with the Defendant was also addressed. Master Gordon-Saker had held that it was reasonable for the Claimant to issue proceedings without first informing MGN on the basis that MGN may misuse BNM’s confidential information. However, the Court of Appeal have held that his reasoning was flawed in that he failed to take into account a number of important considerations. The question has, therefore, been remitted to Master Gordon-Saker so that the issue of prematurity can be re-addressed, taking into consideration the factors highlighted by the Court of Appeal. Lord Justice Irwin, assenting, also commented that “it is nevertheless certainly not a question in respect of which there is only one answer”… watch this space!