By Sean Linley, Costs Draftsman 
In the case of McGuinness v Mawer [2022] EWHC B2 (Costs) (10 January 2022) Costs Judge Leonard held that the reasons given in Hollins v Russell [2003] EWCA Civ 718 that disclosure of a CFA should be the norm had "largely, if not entirely, fallen away" and that a party should only be required to decide whether to disclose their retainer or rely upon other evidence if there was a real reason for doubting the certification of the bill.  
In essence where there is no inter partes success fee then it is not the norm for a party to disclose their retainer.  
The case concerned an application made by the Claimant "for the Defendant to be put to an election in relation to any retainer documents or funding agreements, and for him to be ordered to file and serve a witness statement explaining what costs had been incurred by and paid to WH and from what sources, supported by "all relevant documentary evidence" including but not limited to copies of invoices; whether the VAT on the invoices had been reclaimed by any party; why the Defendant says he is entitled to claim costs from the Claimant "given the costs "have, or appear to have already been paid by the Claimant's estate in bankruptcy"; what invoices have been raised by the Defendant, Mr Pitts or Begbies Traynor or Forensic Recovery Limited the estate, together with copies; and "the specific nature of the agreement between Mr Pitts and Ward Hadaway"." 
On the day of the hearing the Claimant advised that it was "only the application for the Defendant to be put to an election as to disclosure of the retainer was pursued. The application for the Defendant to be ordered to serve a witness statement was, in effect, abandoned." 
Reliance was placed upon Hollins v Russell [2003] EWCA Civ 718 which provided at paragraph 71 that: 
"In all the circumstances, we have come to the conclusion that the Bailey decision should not be extended beyond the facts with which it was dealing, namely that of a conventional bill, so as to obviate disclosure of the CFA as the norm. As we see it, where there is a CFA, a costs judge should normally exercise his discretion… so as to require the receiving parties… to produce a copy of their CFAs to the paying parties in order that they can see whether or not the Regulations were complied with and (where a CFA provides for a success fee) whether the liability of the receiving party to pay that success fee is indeed enforceable. We consider that this is appropriate where receiving parties may claim more than they would otherwise be entitled to in circumstances in which their whole claim may turn out to be unenforceable. Noncompliance may be sufficient to remove the paying party's liability." 
Costs Judge Leonard considered matters as follows: 
"The reasons given in Hollins v Russell for requiring a receiving party to elect either to disclose a CFA or rely upon other evidence have largely, if not entirely, fallen away. The 2000 Regulations were revoked in 2005. The only statutory requirements for a valid CFA now are that it be in writing and not in relation to family or criminal proceedings, and that it complies with certain limits upon any success fee. Success fees are only recoverable in very limited categories of cases, so the practice directions requiring disclosure of success fee information no longer apply except in those limited cases. In this case, as I have observed, there is no success fee. 
In short, Hollins v Russell has limited if any bearing on the facts of this case. The Defendant should only be required to decide whether to disclose his retainer with WH, or to rely upon other evidence, if there is a real reason for doubting the certification of the bill.
The Claimant effectively sought to rely upon perceived inconsistencies in descriptions provided by the Defendant of the retainer. There were also complaints over how the Defendant had been charged and the potential impact of this upon the inter-parties claim.  
The Court concluded thus: 
"Between them, the certified bill and the Replies to the Defendant's Points of Dispute (supported by the Defendant's witness statement) demonstrate that the retainer of 23 January 2012 between the Defendant and WH is a standard contract of retainer under which fees are payable in standard fashion by reference to hourly rates, subject to the proviso that the Defendant is obliged to meet WH's fees only to the extent that assets from the estate are available to pay them. I have no reason not to accept the certification of the bill or the Defendant's evidence as to the nature of the retainer, and I do accept both. The Claimant's unfounded and at times plainly incorrect speculations offer no basis for rejecting it. 
Although I am of the view that it is, strictly speaking, a CFA, I find no real basis for requiring the Defendant either to disclose his retainer with WH or elect to rely upon other evidence. In any event he has, in demonstrating the lack of merit in the Claimant's application, already produced all the evidence upon which he might need to rely in order to meet the Claimant's speculative challenges. This application will, accordingly, be dismissed. 
One might be tempted to think that all of this could been avoided if the Defendant had simply disclosed the retainer. He explains in his witness evidence why he has not done so: 
"Mr McGuinness' conduct in these proceedings has caused me great difficulty and cost. If I believed that he was capable of acting reasonably I would be more inclined to provide a copy of the retainer. However, he has shown time and time again that he is not. If I provide a copy of the retainer, it will simply lead to a slew of further baseless arguments and demands for information, which will lead to even more. There has to be an end point." 
I can understand the Defendant's caution. What stands out about this application is not that there is no, or no adequate, answer to the Claimant's speculations about the nature of the retainer. It is that such answers have been given more than once, but that the Claimant refuses to accept them and presses forward with applications regardless of the evidence that demonstrates that there is no real substance in them.
Pratical Implications 
The SCCO decisions makes clear that the disclosure of a CFA where there is no between the parties success fee is not the norm, contrasting with the Court of Appeal decision in Hollins. Paying parties will often raise generic arguments concerning the disclosure of funding documentation so Mcguinness is a strong bow in receiving parties' arsenals to dispell such requests and arguments (where there is not an inter partes success fee.) 
Notably Costs Judge Leonard provided that even where there was a real reason to doubt the certification of a Bill of Costs then it was for the receiving party to decided whether to disclose the retainer or rely upon other evidence. Proving real reason is likely to be a high hurdle and Costs Judge Leonard did not go into what he would consider real reason would be.  
Where there is a success fee which is recoverable from the opponent then it is likely that the decision in Hollins will remain good law, though given the impact of LASPO in 2013 the number of cases with recoverable success fees have now reduced significantly so its application will be increasingly limited. 
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