Judgment of the Tribunal regarding the application by Mark McLaren Class Representative Limited (“the CR”) for an order that the costs and part of the damages paid to it by the Twelfth Defendant (“CSAV”) pursuant to a settlement agreement be used to cover a portion of the CR’s relevant costs, fees and disbursements incurred in connection with these proceedings.
The settlement with the twelfth defendant provided for payments on the following basis:
- £1,120,000 in damages (the ‘Damages Sum’)
- £280,000 in respect of the Twelfth Defendant’s share of the CR’s costs in the proceedings (the ‘Proceedings Costs Sum’); and
- £100,000 by way of contribution to the CR’s costs of the Collective Settlement Approval Order Application or, in the event that such costs were less than £100,000, as an additional payment towards the CR’s costs of proceedings (the ‘Application Costs Sum’).
The relevant costs, fees and disbursements were those owed by the CR to third parties who have taken a stake in these proceedings, namely (i) the claim’s litigation funder, (ii) the insurers that provided after-the-event adverse costs insurance; (iii) the CR’s solicitors; and (iv) relevant counsel (the “Stakeholders”).
The Application was made pursuant to rules 53(2)(n), 98(1) and/or 104(2) of the CAT Rules, read in conjunction with rules 74, 93(4) and 94(4)(b). Two principal matters arose for determination:
- Whether the Tribunal had power to make the order sought; and
- If it did, whether the Tribunal should exercise its discretion to do so.
The second question was divided into three parts:
- Whether all Funding Matters had been finally determined (in light of the judgments of the Supreme Court in PACCAR [2023] UKSC 28 and of the Tribunal in Alex Neill v Sony [2023] CAT 73).
- Whether payment to Stakeholders should be made at this stage, when proceedings are continuing against other defendants and prior to distribution of damages to the class.
- Whether the Tribunal is satisfied as to the appropriateness of the amount of any payment.
For the reasons given in the Judgment, the Tribunal found that although it had the power to make the order sought, and recognising the benefit of third-party funding to the collective proceedings regime, it would not be appropriate to assess what sums should be paid to funders before the outcome of the proceedings is known.
If the proceedings lead to a substantial judgment or settlement with the remaining Defendants, there may well be a significant amount for distribution to both the class and Stakeholders. However, the proceedings may similarly result in failure with the Defendants succeeding at trial. The trial is listed to commence in January 2025.
On that basis, the Tribunal did not permit the use of any part of the Damages Sum at this stage. It was however prepared to apply an additional £71,000 from the Proceedings Costs Sum to be dealt with in the same way as the £100,000 Application Costs Sum to cover the CR’s costs of the CSAO Application, and gave liberty to apply for payment out of the balance to cover costs of the application.