Key Facts
- •Commission Recovery Limited (Claimant) sued Marks & Clerk LLP and Long Acre Renewals (Defendants) for undisclosed commissions paid to the Defendants by CPA Global Limited.
- •The undisclosed commissions arose from the Defendants' practice of referring clients to CPA for IP renewal services, receiving a commission without client knowledge.
- •The Claimant acted in two capacities: assignee of claims from Bambach Saddle Seat (Europe) Limited and representative of other clients under CPR Rule 19.
- •The Defendants applied to strike out the claim and prevent the Claimant from acting as a representative.
- •The assignment from Bambach Europe to the Claimant was challenged as champertous.
Legal Principles
Law on secret commissions: A payment or gift made as an inducement to an agent, undisclosed to the principal, is a bribe, even without corrupt intent. The court presumes the agent was influenced, and this is irrebuttable. The duty owed may vary from fiduciary to contractual.
Wood v Commercial First Business [2021] EWCA Civ 471
An assignment of property, including a claim for undisclosed commissions, is not champertous. The assignment of a bare right to litigate is champertous and thus unlawful.
Various cases including Trendtex Trading Corpn v Credit Suisse [1982] AC 679, FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45
Representative actions under CPR 19.6 require that the representative and represented parties have the same interest. Conflicts of interest between class members preclude representative actions unless those differences don't prejudice others. The court has discretion to allow or disallow representative actions.
Lloyd v Google [2021] UKSC 50
Outcomes
The Defendants' application to strike out the claim was dismissed.
The assignment from Bambach Europe was not champertous as it involved the assignment of property (undisclosed commissions). The Claimant's representative action was allowed to proceed.