Project:
378 - Dispossessed
Description:
The group is considering a Conditional Fee Agreement (CFA / “no win, no fee”) supported by After-The-Event (ATE) insurance to pursue claims related to the Croyde Bay Holiday Club dispute. While this can reduce upfront cost exposure, the combined impact of success fees, ATE premiums, and disbursements may materially reduce the net recovery received by members. There is also a risk that agreement terms (including withdrawal clauses) could unintentionally lock members into commitments that reduce flexibility during negotiations or settlement.
Desired Outcome:
Members have a litigation option that is financially transparent, proportionate, and aligned with member interests, with clear net-to-member expectations, strong protections against adverse costs, and no “accidental lock-in” that prevents individuals from accepting fair settlement offers.
What Could Go Wrong:
1. Net recovery to members becomes heavily diluted by success fees, ATE premiums, and disbursements.
2. Members sign agreements without understanding key terms (especially withdrawal / individual settlement clauses), leading to unexpected liabilities.
3. The group loses negotiating leverage if trustees believe members will receive little (or are unlikely to proceed).
4. The dispute becomes prolonged and procedural, increasing legal and insurance costs relative to the benefit delivered to members.
5. Confidence fractures within the group due to perceived unfairness or lack of transparency.
Current Situation:
Preliminary legal views suggest there is a credible basis for claims (e.g., fiduciary duty / negligence). A CFA/ATE route is being explored to avoid upfront funding. However, indicative ranges have been discussed in which a substantial portion of recovery could be allocated to success fees and insurance, and members have asked for clarity on net outcomes and on any liability risk if someone withdraws after signing.
Action Strategy:
1. Obtain from any shortlisted firm a one-page “deal sheet” showing: success fee %, ATE premium basis, disbursements, and worked examples of net-to-member outcomes (e.g., recovery of £20k / £50k / £100k).
2. Require plain-language confirmation of: (a) whether members can accept an individual settlement without penalty, (b) the exact withdrawal liabilities, and (c) what triggers ATE costs (and when payable).
3. Treat litigation as a gated decision: pre-action protocol + settlement attempt first; litigation only if terms are understood and acceptable.
4.Maintain a PHC Port evidence trail (communications, valuations, confirmations) to strengthen negotiating leverage and reduce “legal discovery thrash”.
Concern Category:
C1 Feasibility/Business Case
Location:
Analysis: Not available
| Snapshot History |
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| C490_260218.pdf |
I completely take the point that the strategy isn’t dependent on Saltmarsh personally and that the focus is on trustees and the wider structure.
I suppose the angle I’m trying to understand is more about practical outcomes rather than legal positioning.
For example, even if a strong case exists, do we have any sense at this stage of how likely it is that compensation would actually be realised (whether via trustees, insurers, or otherwise), and over what sort of timeframe?
I’m just conscious that if that route becomes prolonged or uncertain, it might be worth thinking in parallel about where we might still have influence in relation to the property itself.
Not suggesting one replaces the other, rather whether there’s a case for keeping both lines of thinking open while we get clearer on the legal position.