Casehub Ltd v Wolf Cola Ltd
Citations:  EWHC 1169 (Ch);  5 Costs LR 835.
The claimant was a commercial claims aggregator. They had acquired the rights to several claims under the Consumer Rights Act 2015. All of the claims involved consumer rights to receive redress from third-parties in relation to cancellation charges imposed by a software company. The software company argued that the assignment of the rights was void for public policy reasons, champerty and maintenance. They also sought determination of whether the cancellation fees could be assessed for reasonableness under Part II of the Consumer Rights Act.
- Were the assignments void for public policy reasons or champerty?
- Were the cancellation fees capable of being void for unfairness under Part II of the Consumer Rights Act?
The High Court held that the assignments were not void for champerty or public policy reasons. The claims were not frivolous, the claimant had a genuine commercial interest in pursuing them, and there were strong public policy reasons for allowing the claimant to pursue them. The arrangement did not circumvent the rules on costs, since the claimant might be liable to the software company for costs in a broader range of circumstances than an individual.
However, the court also held that cancellation fees are not capable of being assessed for fairness under Part II of the Consumer Rights Act.
This Case is Authority For…
The court defined champerty and maintenance as follows:
‘Maintenance is the support by a person of litigation in which he has no legitimate concern without just cause or excuse. Champerty is an aggravated form of maintenance. It occurs when the person maintaining another stipulates for a share of the proceeds of the action or suit or other contentious proceedings where property is in dispute.’
Factors relevant to the decision that the claimant had good reason to pursue the claims in this case included:
- The individual claims were too low-value to be brought in a cost-effective fashion without aggregation;
- The assignment redresses the inequality of arms between individual consumers and the defendant and increased access to justice;
- There was no risk on the facts of a vulnerable litigant or the legal process being abused;
- The assignments were not designed to evade the rules on costs or the provision of restricted legal services;
Where the argument against a clause is effectively that the consumer is being overcharged, an assessment of fairness under Part II of the Consumer Rights Act 2015 would involve assessing the appropriateness of the price payable under the contract. This is impermissible under s.64(1)(b) of the Act.