Marks & Clerk set for trial in ‘secret commissions’ case after appeal rejected
IP firm had argued representative action did not meet ‘same interest’ requirement | Trial expected to take place in January next year.
The UK Supreme Court has rejected Marks & Clerk’s application for permission to appeal in the representative action brought by Commission Recovery on behalf of a class of the IP law firm’s current and former clients, regarding alleged secret commissions.
With the court having refused permission “on the ground that the appeal does not raise an arguable question of law” last month (March 21), a trial is now expected to go ahead in January next year.
Marks & Clerk had argued that Commission Recovery’s claim did not meet the “same interest” requirement required for representative claims under the Civil Procedure Rules (CPR) 19.8 (previously 19.6).
‘Referrals’ for IP renewal services
Commission Recovery was established to pursue the recovery of alleged undisclosed payments made by IP management firm CPA Global, owned by Clarivate, to Marks & Clerk in return for referring its clients to CPA for IP renewal services.
CPA paid these ‘secret commissions’ to Long Acre Renewals, a partnership set up by current and former Marks & Clerk partners, Commission Recovery alleged, claiming that Marks and Clerk hid the payments from its clients and in doing so breached its fiduciary duty to act in their best interests.
Commission Recovery pleaded the case based on that of another company, Bambach Europe, arguing that its case was representative of other companies that had been impacted by Marks & Clerk’s alleged actions.
It said it brought the claim on behalf of all those with the “same interest” as Bambach Europe, encompassing all of Marks & Clerk’s current and former clients that contracted directly with the IP law firm, were subject to its terms of business and had commission paid to CPA by Marks & Clerk in respect of IP rights renewals.
‘Same interest’ requirement
Marks & Clerk challenged the ability of Commission Recovery to act as a representative of other persons who had, or were said to have, the same interest in the proceedings as Commission Recovery did.
Its argument that the “same interest” requirement had not been met was unsuccessful at the High Court in February 2023, and then at the Court of Appeal in a judgment handed down on January 18 this year.
Commenting on the Supreme Court’s decision, a Marks & Clerk spokesperson said: “We are disappointed by the judgment, but we maintain our position that CRL [Commission Recovery] mischaracterises the relationship that our firm had with CPA during the period in question—and the work that was done for our then clients—whilst attempting to use the representative action system in an unsuitable and financially-motivated manner.
“These points remain open following the judgment, and we therefore look forward to showing the High Court at trial why CRL’s complaint cannot be properly advanced on a representative basis.”
Peter Rouse, director of Commission Recovery, said: “Since 2021 Marks & Clerk and its affiliated partnership have taken every possible step to try to avoid this claim being determined on a class-wide basis. Those challenges have failed each time, and I now look forward to the case proceeding to trial next year.”
The Court of Appeal’s judgment in January was the first appellate ruling on the representative action regime since Lloyd v Google.
Lord Justice Nugee said the appeal had “highlighted a number of issues which may lie ahead, and which will no doubt require careful case management”.
In Marks & Clerk and another v Commission Recovery, Marks & Clerk and Long Acre Renewals are represented by Clifford Chance.
Commission Recovery is represented by Signature Litigationpartners Daniel Spendlove and Neil Newing, and senior associate George Bazinas.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories sent like this straight to your inbox
