Caselaw Digest
Caselaw Digest

Commission Recovery Limited v Marks & Clerk LLP & Anor

24 February 2023
[2023] EWHC 398 (Comm)
High Court
A company sued two others for secretly keeping money they earned referring clients to a third company. The court said the suing company could continue its lawsuit and also represent other clients who may have been cheated, even though some details are still missing, as long as the process is fair and efficient. The court's decision lets many small businesses potentially get their money back.

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.

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