Candey Limited v Tonstate Group Limited & Ors.

Candey Limited v Tonstate Group Limited & Ors.

A non-counterclaiming defendant cannot lawfully enter into a damages-based agreement under s.58AA of the Courts and Legal Services Act 1990 and the Damages-Based Agreements Regulations 2013 for payment based on sums or assets merely retained; such agreements are only lawful where payment is made from sums recovered from the opposing party. The DBA in question did not entitle the solicitors to payment based on the value of shares retained, and is unenforceable to that extent.

Parties
Claimant/appellant: Candey Limited; Respondent: Tonstate Group Limited; Respondent: Tonstate Edinburgh Limited; Respondent: Dan-Ton Investments Limited; Respondent: Arthur Matyas
Jurisdiction
England and Wales
Judgment Date
06 July 2022
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal dismissed
Legal Topics
Damages Based Agreements, Contingency Fees, Solicitors' Liens, Litigation Funding, Interpretation of Statutes
Civil Procedure Legal Profession Contract Law Damages Based Agreements Contingency Fees Solicitors' Liens Litigation Funding Interpretation of Statutes

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Parties

Candey Limited

Claimant/appellant

Tonstate Group Limited

Respondent

Tonstate Edinburgh Limited

Respondent

Dan-Ton Investments Limited

Respondent

Arthur Matyas

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether a defendant can lawfully enter into a damages-based agreement (DBA) for resisting a claim under s.58AA of the Courts and Legal Services Act 1990 and the Damages-Based Agreements Regulations 2013
  2. 2 Whether the DBA in question entitled the solicitors to payment based on assets retained rather than sums recovered from the opposing party
  3. 3 Whether the 2013 Regulations are ultra vires for restricting DBAs to sums recovered from the opposing party

Ratio Decidendi

A non-counterclaiming defendant cannot lawfully enter into a damages-based agreement under s.58AA of the Courts and Legal Services Act 1990 and the Damages-Based Agreements Regulations 2013 for payment based on sums or assets merely retained; such agreements are only lawful where payment is made from sums recovered from the opposing party. The DBA in question did not entitle the solicitors to payment based on the value of shares retained, and is unenforceable to that extent.

Court Disposition

Appeal dismissed

Orders

  • Both appeals dismissed
  • No entitlement for solicitors to payment based on retained shares