UK Supreme Court rejects Marks & Clerk's appeal in secret commissions case

The UK Supreme Court has rejected an application for permission to appeal by IP law firm Marks & Clerk and its affiliated partnership in the ongoing high-profile secret commissions representative action claim brought by Commission Recovery Limited on behalf of a class of Marks & Clerk’s current and former clients. Trial is now expected to go ahead in January next year.

Notably, Lords Reed and Leggatt were two of the five justices who decided Lloyd v Google before the Supreme Court in November 2021.

Marks & Clerk had argued at the High Court, and then again at the Court of Appeal, that the claim advanced by Commission Recovery Limited did not meet the “same interest” requirement needed for representative claims under CPR 19.8 (previously CPR 19.6). In each instance, Marks & Clerk was unsuccessful. The Court of Appeal upheld the High Court’s ruling that the claim should proceed under CPR 19.8 in a judgment handed down in January. That judgment was the first appellate ruling on the representative action regime since Lloyd v Google, and attracted significant interest within the legal market and elsewhere.

Commenting on the Supreme Court’s decision, Peter Rouse, director of Commission Recovery Limited, 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.”

Commission Recovery Limited is a company established to bring the claim against intellectual property law firm Marks & Clerk in relation to secret commissions allegedly paid by CPA Global, an IP management organisation, to Marks & Clerk in return for referring their clients to CPA. CPA allegedly paid these secret commissions to Long Acre Renewals, a partnership set up by current and former partners of Marks & Clerk.

It is alleged that Marks & Clerk hid these commissions from their clients, breaching their fiduciary duty to their clients to act in their best interests. Under established English law confirmed in Wood v Commercial First Business Ltd [2021], secret commissions are treated as bribes.

In bringing the claim, Commission Recovery Limited pleaded the case based on that of another company, Bambach Europe, arguing that their case was representative of other companies that had been impacted by Marks & Clerk’s alleged actions under CPR 19.8. Commission Recovery Limited argued that they bring 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 Marks & Clerk
• Were subject to Marks & Clerk’s terms of business
• Had commission paid by CPA to Marks & Clerk in respect of the renewal of their IP rights

Commission Recovery Limited is represented bySignature Litigationpartners Daniel Spendlove and Neil Newing, and senior associate George Bazinas