R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others
[2023] UKSC 28
Nicholas Stoop v Nicola Maxine Johnson
23 February 2024
[2024] EWHC 286 (Ch)
High Court
Two people had a deal where one would help the other get money from a bank, and would get half the money if successful. A court decided the deal was invalid because it didn't clearly state *why* the split was 50/50 and also because it was partly about a divorce case. The court also decided the helper hadn't done enough to deserve the money.
Key Facts
- •Nicholas Stoop (Claimant) and Nicola Maxine Johnson (Defendant) had a damages-based agreement (DBA) for claims management services.
- •The agreement stipulated a 50% success fee for compensation secured regarding mortgages on Warwick House and a Paris property.
- •Ms. Johnson's former husband was involved in criminal proceedings in France, complicating the divorce and property matters.
- •Mr. Stoop provided extensive consultancy and claims management services, but the relationship deteriorated after their personal relationship ended.
- •Ms. Johnson ultimately reached a settlement with Barclays for £6 million.
- •The central legal dispute revolved around the enforceability of the DBA under UK law.
Legal Principles
Enforceability of Damages-Based Agreements (DBAs)
Section 58 AA of the Courts and Legal Services Act 1990 (CLSA) and the Damages Based Agreements Regulations 2013
Regulation 3(c) of the 2013 Regulations requires DBAs to specify the reason for the agreed payment level.
Damages Based Agreements Regulations 2013
A DBA must not relate to family proceedings under Section 58 AA(4)(aa) CLSA.
Section 58 AA(4)(aa) CLSA and Section 58A(1)(b), (2) CLSA
Construction of DBAs requires consideration of the agreement's language and the factual matrix.
Lexlaw Limited v Zuberi [2021] 1 WLR 2797, Wollenberg v Casinos Austria, Rees v Gateley Wareing (discussed but overruled in part)
Causation in DBAs: The claimant must demonstrate a substantial causal connection between their services and the compensation obtained.
Nahum v Royal Holloway (discussed), Wollenberg v Casinos Austria, Rees v Gateley Wareing (discussed)
Interpretation of consumer contracts: Ambiguous terms are interpreted in favour of the consumer.
Section 69 of the Consumer Rights Act 2015
Outcomes
The Claimant's claim was dismissed.
The DBA was unenforceable due to non-compliance with Regulation 3(c) of the 2013 Regulations (failure to specify the true reason for the 50% success fee) and Section 58 AA(4)(aa) CLSA (relating to family proceedings). Further, the Claimant failed to demonstrate a substantial causal link between his actions and the compensation received.