CPR 86: Stakeholder Claims & Costs
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What is a Stakeholder Claim Pursuant to CPR 86?
A CPR 86 Stakeholder claim is made when there is a dispute as to some form of property, quite often a sum of money, and the determination of the Court is sought to determine how the property should be dealt with/distributed or if one party has a more reasonable claim over the property than another. CPR 86 proceedings ensure that the stakeholder is able to dispose of the property in a Court approved fashion, without incurring a potential liability to one or more other parties who have competing claims over the property.
This structured process is particularly useful in scenarios such as contested funds held by a bank, assets in an estate with competing beneficiaries, or other disputes involving conflicting claims to tangible or intangible property.
What is the CPR Part 86 Process?
In short, a stakeholder application is made by way of a Part 8 Claim Form (which by default is a Multi Track claim/set of proceedings pursuant to CPR 8.9(c)), typically requesting a declaration or order regarding who is entitled to the money or property and often supported by a witness statement setting out the circumstances of the dispute.
The Claimant (Stakeholder) that has made the application is neutral in respect of any entitlement of the property to the named Defendants (so that no person is under a liability to one of the other parties on conclusion of the proceedings), and CPR 86 proceedings should ideally not involve any arguments over the merits of the underlying dispute between the competing parties, as the focus should be solely on determining to whom the disputed assets should be released.
Once the claim is filed, the Court assumes jurisdiction to decide the matter. The stakeholder may request that the Court issue an order requiring them to pay or deliver the disputed property into the Court’s custody or otherwise direct how it should be dealt with. This step relieves the stakeholder of responsibility for the property and ensures it is secured while the competing claims are resolved.
The Court will then proceed to resolve the claims between the Defendants. This may involve:
Deciding Ownership: The Court can determine which of the Defendants is entitled to the property based on the evidence and legal arguments presented.
Further Directions: In some cases, the Court may order additional proceedings, such as a trial or a hearing, to fully assess the merits of the competing claims.
Once the stakeholder has complied with the Court’s initial orders, such as transferring the property into Court or to the rightful party as determined by the Court, they are typically discharged from the proceedings. At this point, the stakeholder is no longer liable concerning the property and can step away from the matter.
Stephenson Harwood LLP v Medien Patentverwaltung AG
In Stephenson Harwood LLP v Medien Patentverwaltung AG [2020] EWCA Civ 1743 handed down in December 2020, it was demonstrated the complexities that can arise from CPR 86 proceedings, particularly in relation to cross-border disputes as to contested property, and in which jurisdiction was raised as an issue before the Court of Appeal, albeit in the absence of an application pursuant to CPR 11.
It was ultimately decided by the Court of Appeal that a CPR 11 application could be made, and in its absence, jurisdiction had been accepted in the CPR 86 proceedings, and therefore that the decision as to disbursing of property was correct.
The judgment clarifies the interplay between CPR Parts 86 and 11, highlighting that stakeholder proceedings inherently involve jurisdictional considerations, which must be explicitly addressed in line with Part 11 requirements. It also provides guidance on managing cases involving international parties, affirming that participation in stakeholder proceedings does not equate to broader acceptance of the court’s jurisdiction.
This ruling underscores the need for procedural precision, directing legal practitioners to raise jurisdictional objections appropriately under CPR Part 11 to prevent unintentional submission to the court’s authority.
Case Study: Dispute Over Trust Assets
ARC Costs recently assisted a law firm in a CPR 86 set of proceedings. An agreement had previously been reached between two Trustees and the beneficiaries of a property, which was to be sold. A question arose, however, as to the tax liabilities of the Trust and the input of an expert accountant was required to advise on the same. At this juncture, one of the Trustees ceased to instruct the Claimant Solicitor, and, in the absence of joint instructions, the Trustees were put on notice that a CPR 86 claim would need to be made to confirm how the Trust was to be dealt with. An Order was also sought for payment of costs from the Trust.
One of the Defendant’s failed to engage with the proceedings or file an Acknowledgment of Service, despite a Process Server having been instructed to ensure service had been affected. Ultimately, the matter was disposed of at a final hearing, whereupon it was decided that the Trust Fund would be paid into the Court, with the Claimant Solicitor’s costs to be paid from the proceeds held by the Court, and sums set aside for payment of the same.
ARC Costs were subsequently instructed to settle the Bill of Costs for assessment by the Court, which required urgent turnaround and was completed within 3 days of initial instruction.
How can ARC Costs Assist You with Your Costs?
ARC Costs is a team of expert experienced Costs Draftsman and Costs Lawyers whose senior team possess in excess of 30 years’ experience.
We are independent and can assist Paying or Receiving Parties in costs disputes and engage in an extensive array of different types of common and niche costs disputes, including CPR 86 claims.
For Receiving Parties, we regularly quantify work done and prepare Costs Budgets to forecast the full expenditure within a set of proceedings, as well as 3 column and electronic Bills of Costs on the successful conclusion of proceedings. Able to conduct detailed assessment proceedings on your behalf, we are also able to negotiate amicable outcomes to recover your costs, or advocate on your behalf at detailed assessment hearings.
For Paying Parties, we are experts in settling your legal arguments in a compliant fashion within Points of Dispute and negotiating reductions to ensure the costs you pay are only reasonable and proportionate to the main dispute.
If you wish to speak to one of our experts, please email us at info@arccosts.co.uk, or speak to one of the team on the phone on 01204 397302.
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