CANDEY to appeal to Supreme Court in Challenge to Inequality of Arms Case
CANDEY is seeking permission to appeal to the Supreme Court in the matter of Candey Limited v Tonstate Group Limited & Ors following the judgment of the Court to Appeal dealing with the critical – yet previously untested – issue of whether Damages Based Agreements (DBAs) are only available to claimants (or defendants with a counterclaim).
In a judgment which creates an unfortunate and manifestly unfair imbalance in favour of claimants over defendants, the Court of Appeal found that (1) defendants without a counterclaim are not entitled to enter into a DBAs; and (2) the preservation by a litigant of a disputed asset does not amount to a “benefit derived from your opponents”.
By refusing to permit defendants to use DBAs (which are otherwise freely available for claimants), the judgment raises serious questions about the equality of arms between defendants and claimants, particularly in circumstances where defendants (unlike claimants) have not chosen to become embroiled in litigation. The judgment in effect forces defendants to incur traditional pay-as-you-go legal costs whilst their opponent can avail of a contingent arrangement. Furthermore, rather than cultivating fairness, it fosters an environment in which wealthy claimants can pile financial pressure on their opponents undermining impecunious defendants’ ability to defend themselves.
With public funding of legal fees at historic lows, DBAs are one of only a handful of fee structures that enable impecunious litigants to obtain legal representation. The judgment undermines that ability and at a stroke diminishes access to justice for those who cannot afford traditional pay-as-you-go fee structures. The judgment also erodes the value of lawyers’ work retaining assets for clients which may otherwise have been lost to their opponents.
CANDEY partner, Leo Nabarro, commented:
“CANDEY continues to fight for access to justice and lawyers’ rights. The 2013 DBA regulations were ineptly drafted. In view of the Ministry of Justice’s inertia we hope the Supreme Court will hear this case and rectify the imbalance of rights between claimants and defendants to ensure all parties to litigation are on an equal footing”
