AB & Ors v CD & Ors [2023] EWHC 2419 (Ch) (03 October 2023)

AB & Ors v CD & Ors [2023] EWHC 2419 (Ch) (03 October 2023)

The proprietary freezing order exception for legal expenses must be interpreted strictly as written, but in exceptional circumstances where all assets are subject to proprietary claims and the proposed legal fees would extinguish those claims, the court must be satisfied on proper evidence that the costs sought are reasonable before granting orders to realise or charge assets. The court is not satisfied the fixed fee under the CFA is reasonable and declines to grant the primary relief sought, but allows a capped release of £1.2m plus VAT for legal expenses under Marino principles.

Citation
[2023] EWHC 2419 (Ch)
Parties
Claimants: AB and ors; Defendants: CD and ors
Jurisdiction
England and Wales
Judgment Date
03 October 2023
Procedural Posture
Interim Application in Civil Proceedings (chancery Division) / Application to Vary Proprietary Freezing Order
Outcome
Application for variation of proprietary freezing order to permit sale and charging of assets for legal fees under CFA refused; court allows capped release of funds for legal expenses.
Legal Topics
Proprietary Freezing Orders, Legal Expenses, Interpretation of Court Orders, Conditional Fee Agreements, Marino Test
Civil Procedure Insolvency Trusts and Equity Proprietary Freezing Orders Legal Expenses Interpretation of Court Orders Conditional Fee Agreements Marino Test

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Parties

AB and ors

Claimants

CD and ors

Defendants

Procedural Posture

Interim Application in Civil Proceedings (chancery Division) / Application to Vary Proprietary Freezing Order

Legal Issues

  1. 1 Whether the proprietary freezing order should be varied to permit the First Defendant to realise assets for payment of legal fees under a conditional fee agreement
  2. 2 Interpretation of 'reasonable sum' exception in proprietary freezing order
  3. 3 Appropriate quantum of legal expenses to be released from disputed assets

Ratio Decidendi

The proprietary freezing order exception for legal expenses must be interpreted strictly as written, but in exceptional circumstances where all assets are subject to proprietary claims and the proposed legal fees would extinguish those claims, the court must be satisfied on proper evidence that the costs sought are reasonable before granting orders to realise or charge assets. The court is not satisfied the fixed fee under the CFA is reasonable and declines to grant the primary relief sought, but allows a capped release of £1.2m plus VAT for legal expenses under Marino principles.

Court Disposition

Application for variation of proprietary freezing order to permit sale and charging of assets for legal fees under CFA refused; court allows capped release of funds for legal expenses.

Orders

  • Refused permission to realise and charge assets for payment of fixed fee under conditional fee agreement.
  • Permitted release of £1.2m plus VAT for legal expenses, in addition to £120,000 already advanced.