The Court of Appeal upholds lower courtâ€™s decision to grant relief from sanctions for failure to give notice of funding arrangements
In Caliendo v Mishcon de Reya  EWHC 3414 (Ch) on 21st October 2014, Mr Justice Hildyard had granted the Claimants relief from sanction under the old CPR 44.3B and allowed the Claimants to keep their CFAs with DLA Piper, despite having served Notice of Funding late and in contravention of Paragraph 9.3 of the PDPAC which requires that a party who enters into a funding arrangement must inform the other parties;
â€œas soon as possible and in any event within 7 days of entering into the funding arrangement concerned or, where a claimant enters into a funding arrangement before sending a letter before claim, in the letter before claim.â€
Mr Justice Hildyard found that relief could be granted even though the Claimants had no â€œgood reasonâ€ for their delay, finding that the Defendant had not been prejudiced by the delay and it would not be â€œfair, just or appropriateâ€ to deny the relief sought.
The Defendant appealed on 7 grounds.
In dismissing the appeal Lady Justice Gloster, sitting in the Court of Appeal, reiterated the importance for the court to consider the three stage test in Denton & Ors v TH White Ltd & Ors  EWCA Civ 906
In Paragraph 22 of his judgment Mr Justice Hildyard had identified the three stage test as follows:
The first stage is to identify and assess the seriousness and significance of the "failure to comply with any rule, practice direction or court order" which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate "all the circumstances of the caseâ€, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]
The Court of Appeal analysed Mr Justice Hildyardâ€™s reasoning at length, and found no real grounds for interfering with the exercise of his discretion in granting relief.
This case compounds the importance of the Denton test and highlights the need for the Court to first consider the effect of the breach, with the prejudice suffered should relief be granted, a secondary factor.