17/5/2002 CC (Kingston on Thames) Judge Michael Cook

CASE DETAILS

This was an appeal by the Claimant against her costs arising out of an RTA case. The appeal focused upon the hourly rates allowed and the medical report fees. The Judge allowed the first medical report at £375, but disallowed the second at £140. The district judge reduced charges by the medical agency. He found that the solicitors could not charge on the basis that the work had been done by a fee earner in their firm.

CASE SUMMARY

Reasonable agency fees were allowed in this case. The invoices of medical agencies should distinguish between the medical fee and their own charges to ensure that they did not exceed the reasonable and proportionate cost of the solicitors doing the work.

(1)The hourly rates were reinstated. The DJ was found to be wrong in this regard. (2) It was perfectly acceptable to use an agency and for their fees to include an element of profit costs (3) medical agents fees were allowable between the parties (4) Invoices should be split to show profit costs claimed in order for the court to be satisfied as to their reasonableness (5) Work done by the agency was seen as work undertaken by the solicitor

Appeal successful.

Part 8 EL case where IP in dispute. IP three stage premium. Claimed at £750 + IPT. Insurance provider produced no evidence that premium was reasonable where D argued that C had no risk with D’s costs pre issue. Premium was allowed, but at £450+IPT. This case re addresses the balance of burden of proof re the reasonableness of the premium, back to the Claimant.

Brooke LJ (V-P), Dyson LJ, Lloyd LJ, Master Hurst (Senior Costs Judge))

CASE DETAILS
The matter concerned an appeal of a decision in the SCCO whereupon the Claimants CFA's were found to be unenforceable as the solicitor had failed to make the necessary enquires in to the existence of BTE insurance with the relevant Claimants. A telephone conversation only was made by the solicitor to ascertain the various Claimants BTE position. The Law Society intervened and argued that 'Hollins v Russell' required the court to consider whether the client had suffered actual prejudice as a result of an alleged failure to satisfy CFA Reg 4(2)(c). It was also argued that the unusual features of the statutory scheme were such that the enforceability of a CFA was to be judged by reference to the circumstances known to exist at the time when the question arose (ie when the claims management company asked the BTE questions), not when the CFA itself was entered into.

CASE SUMMARY
When determining whether a solicitor had failed to satisfy a condition referred to in the Courts and Legal Services Act 1990 s.58(3), it was not necessary to consider whether the client had suffered actual prejudice.

• The question of whether or not the client had suffered actual prejudice as a result of a failure to comply with a condition had not been decided in 'Hollins v Russell'. The starting point had to be the clear and uncompromising language of s.58(1) and s.58(3) of the 1990 Act. If one or more of the applicable conditions was not satisfied, the CFA would be unenforceable.
• Parliament had to be taken to have deliberately decided not to distinguish between cases of non-compliance that were innocent and those that were negligent or committed in bad faith, or between those that caused prejudice and those that did not.
• The conditions stated in s.58(3)(c) and in particular the requirements prescribed in the regulations were for the protection of the solicitor's clients. Parliament had considered that the need to safeguard the interests of clients was so important that it should be secured by providing that, if any conditions were not satisfied, the CFA would be unenforceable and the solicitor would not be paid. Accordingly, the question as to whether the client had suffered any prejudice was not relevant to the question of whether the solicitor had breached a condition.
• The enforceability of a CFA was to be judged by reference to the circumstances existing at the time the CFA itself was entered in to.
• Whilst it was not possible to give rigid guidance as to the questions that a solicitor should ask in every case, the following factors would be relevant: the nature of the client; the circumstances in which the solicitor was instructed; the nature of the claim; the cost of the ATE premium; and, if the claim had been referred to solicitors who were on a panel, the fact that the referring body had already investigated the question of BTE insurance.

Mrs Justice Rafferty ( Master Wright sitting as Assessor)

CASE DETAILS
The Claimant had entered in to a CFA with his first firm of solicitors. The solicitor with conduct of his case subsequently moved firms on two occasions. On both moves, the CFA was purportedly assigned to the new firm. The Defendant contended that the assignments were unlawful and that the solicitor failed to carry out and repeat the necessary requirements of the CFA Regulations 2000 Reg 4 on each occasion.

CASE SUMMARY
Where a solicitor had made a professional move, taking to her new firm a client on a Conditional Fee Agreement, the CFA could be lawfully assigned to the new firm, since the relationship between the client and the solicitor had involved personal confidence, and what drove events in the case was the trust and confidence the client had in the solicitor.
• Significance was attached to the intention behind the course adopted by the assignments.
• Although there were breaches of Reg 4, the Master could not be said to have gone outside the reasonable ambits of discretion on ruling that the breaches had not had a materially adverse effect upon the protection afforded to the client or the proper administration of justice.
• As the solicitor had personally given the Reg 4 oral advice at the outset, the client could be satisfied that when the solicitor moved to the second and third firms, the proper required advice had been given.

Master Wright

CASE DETAILS
The Claimants had been employed by the Defendant and had suffered noise-induced hearing loss. The Claimants had entered into CFA's with their solicitor. The Defendant challenged the enforceability of the CFA's on the grounds that the solicitor had merely asked the question as to whether the Claimant's had any existing LEI that would cover the claim, and not requested sight of all policies in the Claimants possession.

CASE SUMMARY
The Conditional Fee Agreements made between the Claimant's and their solicitors were found to be unenforceable by reason of breach of CFA Regulations 2000 Reg 4(2)(c), since the solicitors had failed to make adequate and thorough enquiries as to the existence and benefits of BTE insurance.

• The solicitors had not complied with CFA Reg 4(2)(c) because they had asked the wrong questions. Whilst the solicitors had asked whether the Claimants had credit cards, insurance policies or trade union membership, which would have entitled them to legal expense insurance, such question had focused on whether such insurance had been in respect of the contemplated claim. Such an enquiry had required the Claimant to interpret what could have been a complex document to establish whether any BTE existed, and, being unsophisticated clients, was an inadequate enquiry and would not have satisfied CFA Reg 4(2)(c).
• Whilst it was unlikely that the Claimants would have had any existing LEI cover, inadequate enquiries were undertaken and therefore the CFA was found to be unenforceable.

Master Hurst

CASE DETAILS
Following an accident in his black cab, the Claimant had signed an agreement with a claims management company which entailed obtaining an ATE premium of £798.00. The matter was referred to panel solicitors from the claims management company on the basis that the Claimant had no pre-existing Legal expense cover. No further enquires were undertaken by the panel solicitors. Damages of £1,814.00 were recovered.

CASE SUMMARY
Where it had not been shown that proper enquires had been made by the Claimant's Legal representative into whether the Claimant's liability for costs was covered by pre-existing insurance, there had been a material breach of the CFA Regulations 2000 Reg 4 (2) (c) and therefore the CFA was found to be unenforceable.

• The premium on the face of it was deemed to be disproportionate, which demanded investigation.
• It was not sufficient for the Legal Representative to rely upon enquires undertaken by the claims management company in respect of existing BTE.
• It was not sufficient to merely enquire as to whether there was existing LEI cover on the motor policy.
• If solicitors were permitted to skimp on the proper investigation of Legal expense insurance, the administration of justice would be badly served.

Judge Stewart QC

CASE DETAILS
The Claimant appealed against an order that her costs be assessed at nil due to a breach of the CFA Regulations 2000 reg 4(2)(c). Following a motor accident, the Claimant was asked by her solicitor whether she had pre existing legal expense cover. Via a conversation with her solicitor, the Claimant confirmed that she held no LEI cover to cover the claim. It later transpired that she did in fact hold sufficient LEI.

CASE SUMMARY
It was held that the breach of CFA Regulation 4(2)(c) was material and accordingly the CFA was found to be unenforceable. Solicitors had to ensure that clients made an informed choice in relation to legal expense insurance. To comply with the CFA Regulations 2000 Reg 4(2)(c), it was not normally enough for a solicitor to simply ask the client whether they had legal expense insurance, some form of further enquiry was required.

• The word 'considers' in Reg 4 (2)(c) required something more than merely asking the question and getting an answer in circumstances where there was no reasonable expectation that the client would necessarily realise whether they had legal expense cover
• In this case, it was found that there was a materially adverse affect upon the protection afforded to the client and the proper administration of justice on a number of respects: a) her position in respect of Part 36; b) if she decided to change solicitors or terminated the agreement; c) in respect of potential shortfalls upon assessment; and d) as regards the provisions relating to death.

District Judge Wharton

CASE DETAILS
This Claimant was involved in a rear end shunt, and subsequently made a claim under the 'TAG' scheme. A Claim for costs was made excluding success fee, but claiming an ATE premium. The TAG scheme operates by initially signing the Client up to a service agreement / declaration form (from a mobile stand), such agreement constituting a proposal for the ATE premium. If the Claimant's claim is accepted, he is sent a confirmation of the same and it is at this point that he becomes insured. The Claimant then completes a questionnaire, which is sent to TAG's vetting company (AIL), who, if the value of the claim exceeds £1,500.00 and has more than a 50% chance of success, passes the file on to a firm of solicitors, who in turn, send the Claimant a CFA to complete. A member of AIL then attends the Claimant to explain the CFA and obtain the necessary signature.

CASE SUMMARY
Failure by a 'Legal representative to discharge the requirements of CFA Regulations 2000 Reg. 4 constituted a breach of the Regulations, which rendered the CFA unenforceable. It followed that there was no right to an indemnity in respect of the Claimant's costs from the Defendant.

• Regulation 4 of the CFA Regulations 2000 was mandatory. It required a Legal representative to discharge it's requirements.
• A member of TAG's vetting firm AIL did not constitute a 'Legal Representative'.
• The statutory duties imposed on the 'Legal representative' by Reg 4 were non-delegable beyond a member of the conducting firm of solicitors.

Lord Phillips of Worth Matravers MR, Brooke LJ, Longmore LJ)

CASE DETAILS
The Claimant was a passenger in a car being driven by the Defendant which was involved in a collision with another vehicle. The Claimant took out an ATE policy. The Claim was settled for a sum of £2,250.00. During costs-only proceedings, the Defendant disclosed a copy of the Defendant's BTE policy, which contained provision to cover the Claimant's claim against the Defendant. Guidance regarding BTE enquires was provided.

CASE SUMMARY
A claimant car passenger could recover his after-the-event legal expenses insurance premium where he had failed to enquire whether the driver's before-the-event insurance was available to him because it was not reasonable to require the claim to be conducted by the his opponent's insurers. The court prescribed guidelines for similar future cases:

• It was not incumbent for a passenger to use the drivers policy
• In a relatively small( ie under £5,000) RTA claim, existing BTE insurance should be utilised
• A solicitor should ask the client to produce at the first interview a copy of his/her relative motor and household insurance policy, as well as any stand alone LEI policy belonging to the client or the spouse or partner at the time of the incident
• A solicitor was not obliged to embark on a treasure hunt
• The solicitor should ordinarily ask the client to obtain a copy of the driver's insurance policy

6/12/2006

Court of Appeal Waller LJ, Jacob LJ

CASE DETAILS

This was a very complex and highly litigated case. Ultraframe appealed against a costs order made against them in respect of proceedings between them and the respondents. Ultraframe had been unsuccessful; however, the judge had found that that Defendant had lied and submitted forged documents. Ultraframe had incurred disproportionately high costs in proving the Defendant's dishonesty. As a result, the Judge awarded a reduction of 20% of the costs in the Defendant's favour. Ultraframe sought an appeal.

CASE SUMMARY

Appeal dismissed.

Dishonesty can be raised upon assessment to limit costs. This is a direct contradiction of the case of Aaron v Shelton. Consideration of conduct should take place before the Judge making the final determination on the case and then also upon assessment. The dishonest party should however, not be punished twice for the same crime.

2005
Court of Appeal
Longmore LJ, Maurice Kay LJ

CASE DETAILS

This was an appeal against a costs order made in favour of the respondent in a personal injury case. The respondent had sustained injury to her back, pelvis and head and pleaded her case at £400,000. The appellant had obtained video surveillance of the respondent which showed purported exaggeration of symptoms. The judge found that she had exaggerated her injuries and accordingly made an award of £23,331. The Appellant had initially made a payment into Court in the sum of £184,442, but withdrew all but £10,000 of this money after viewing the surveillance. Nevertheless, as the respondent beat the payment into court that remained, she was awarded her costs.

CASE SUMMARY

Appeal allowed.

The Court must take into account intentionally exaggerated claims. The Defendant was deemed the overall ‘winner’ in this case. Even though the payment into court was beaten, the defendant was entitled to their costs following the date of the payment into court as the Court was bound to take into account the parties conduct. The respondent was criticised for not negotiating the matter or making any offers during the main action.

24/5/2004
QBD
Jack J, Master Campbell, Gregory Cox

CASE DETAILS

This was an Appeal by the Claimant against a ruling made on detailed assessment. Substantive Proceedings were settled at Trial by a consent order that the action be dismissed with the Defendants costs to be paid on an indemnity basis. At the detailed assessment the Claimant raised the Defendants conduct during the main action as a way of trying to reduce the Defendants costs.

CASE SUMMARY

Appeal dismissed.

It was found to be an abuse of process to raise conduct at a detailed assessment when this could have been done before the Trial Judge or when agreeing the final order. If the paying party failed to do this when they had the opportunity, it was not open to them to raise it again upon assessment.

26/3/2002

Court of Appeal
Kennedy LJ, Jonathan Parker LJ, Sir Swinton Thomas, Buxton LJ

CASE DETAILS

This was an appeal following the dismissal of the Defendant's appeal. The proceedings concerned a personal injury claim commenced by the Claimant in respect of her damaged hand. Following initial investigations, the Claimant claimed that she was suffering from reflex sympathetic dystrophy which was a serious condition. The Claimant then filed a schedule of loss in the sum of £617,000. However, 5 weeks prior to Trial, the Defendant filed surveillance evidence which clearly showed that the Claimant was exaggerating her claim. As a result, she accepted the Defendant's payment into Court in the sum of £2,500. Costs were agreed on the standard basis. The Claimant then submitted a bill in the sum of £82, 000. The Defendant argued that this was wholly unreasonable given the damages recovered. The Judge awarded the Claimant 60% of her costs and the Defendant subsequently appealed.

CASE SUMMARY

Appeal allowed.

Where a Claimant pursued a claim for damages for personal injury she knew she had not suffered, there was no reason why the Defendant should bear any part of the costs expended in that unreasonable pursuit. The matter was returned to the County Court for further costs determination.

14/6/2000
Court of Appeal Aldous LJ, Chadwick LJ, Buxton LJ

CASE DETAILS

This was an appeal by the Claimant in a negligent advice case. As a result of the Defendant’s advice, the Claimants' became involved in expensive litigation with their local council, ending in the necessity to pay heavy costs. The claimants' also alleged that they lost the opportunity to sell their house at an advantageous price. They claimed damages of over £2.7 million.

The Judge held that the Defendant had been negligent in his advice and ordered him to pay the sum of £156.343 which was the sum paid in the lost litigation. The Judge did not accept that any opportunity to sell the property had been lost as a result of the Defendant's negligence. The Judge ordered the Defendant to pay the Claimant's 60 per cent of their costs and that the Claimant's should pay the Defendant 40 per cent of his costs of the action.

CASE SUMMARY

Appeal allowed.

Although a Judge was entitled to penalise a successful Claimant in relation to the costs of failed issues, in this case it appeared that the Judge had wrongly taken account of costs which had been incurred in relation to issues which the Claimant's had abandoned before, or not pursued at, the trial, and which would be disallowed in any event on a detailed assessment.

23/11/2007 Ch D Morgan J

CASE DETAILS

This was a solicitor own client case , where an action was brought by a client against Withers in relation to the level of billing. In May 2005, the solicitor had provided an estimate of costs to Trial. The Trial was originally estimated to last for 4 days, however actually ran for 18 days. Subsequently, the solicitor submitted 21 separate bills to the client, of which 16 were to be assessed at detailed assessment. The solicitor was found to be bound by this estimate at the original hearing and subsequently appealed.

CASE SUMMARY

Appeal allowed. Solicitors were entitled to reasonable remuneration for their services.

The solicitor had failed to comply with the Solicitors Costs Information and Client Care Code in that it had not warned the client that costs were escalating well above the estimate provided. However, the estimate did not bind the solicitor but provided a useful yardstick from which to assess the reasonableness of their costs.

4/6/2007 Sup Ct Costs Office Master Gordon-Saker

CASE DETAILS

This was a serious gliding accident, where it was shown that the glider was badly maintained. The action was brought against the hire company, the owner and the company responsible for maintaining the glider. Following various investigations, the Claimant was forced to file discontinuance. As a result, he was responsible for the Defendant’s reasonable costs. The Defendants had filed a costs estimate at allocation stage, estimating costs to Trial at around £50,000. However, they presented a bill in the sum of £244,500, almost 5 times greater than the estimate.

CASE SUMMARY

The Court found that the original estimate was surprisingly low. However, the Claimant was a ‘reasonable man’, and had relied on the estimate to purchase what he thought was adequate insurance cover (PD 6.6(2)(b)(ii). Furthermore, the Defendant’s failed to provide adequate explanation for the vast difference between the estimate and the final bill.

The Court found that the appropriate recoverable amount in this case was £70,000.

8/12/2003 CA (Civ Div)

Lord Phillips of Worth Matravers MR, Arden LJ, Dyson LJ

CASE DETAILS

Appeal by the defendant from the decision of HH Judge Mitchell dismissing their appeal from the district judge's assessment of costs.

This was a multi track EL case which settled for £48,000 less CRU prior to Trial. At AQ stage the Claimant filed an estimate stating that their overall costs would be £6,000 + VAT, no further estimates were filed. The Claimant submitted a bill for £21,741.28. This comprised £14,482.80 in respect of profit costs, £2,700 of which was incurred prior to allocation.

The DJ assessed the bill at £20,488.83 inclusive of VAT, with no reduction being made as a result of the estimate. The Defendant failed in their initial appeal to overturn this decision, but a further appeal was granted in order for the Court to determine this issue.

CASE SUMMARY

Appeal Dismissed.

An accurate estimate of costs could not have been provided at the Allocation stage in this case. If solicitors were bound by these estimates then ‘it is likely that the estimates of future costs will either be routinely inflated to provide for every eventuality or will be so qualified as to be meaningless.’

The Defendant had not made their decision to settle the matter as a result of the Claimant’s estimate. “C should not be bound by the estimate in the absence of any evidence that D had relied on them.”

‘Where it becomes clear during the course of the litigation that theestimate was inaccurate, it is all the more important to comply with the obligation in CPR 43 PD para 6.4(2) to file an updated estimate at the listing questionnaire stage.'

31/7/97 CA (Civ Div) Kennedy LJ, Waite LJ, Auld LJ

CASE DETAILS

Two appeals in relation to costs. The case of Truscott involved the Claimant instructing an expensive firm of London solicitors upon a friend’s recommendation after he became dissatisfied with his local solicitors. These rates were ordered to be paid, but later disallowed. The case of Wraith involved the Claimant who was based in Sheffield pursuing a case for industrial disease through his union solicitors. These hourly rates were allowed.

CASE SUMMARY

Both appeals were allowed.

It was unreasonable for the Union to have instructed a London firm. Hourly rates recoverable are those of solicitors local to the Claimant unless there is a connection to the accident elsewhere. If firms are instructed which have no obvious connection with the area or have no special expertise they must expect to recover lesser sums in costs.

27/3/98 CA (Civ Div) Butler-Sloss LJ, Henry LJ, Judge LJ

CASE DETAILS

This case involved an Appeal following an appeal against a County Court order that the Claimant disclose an affidavit of documents and produce a certain document during an assessment of costs. This was an EL case, indemnified by the claimants union AEEU. The matter was settled prior to Trial, with costs to be agreed. The Claimant’s bill of costs exceeded £30,000 and was signed by a partner. The defendants objected among other things, to the hourly rate being claimed, requesting proof that there had been no breach of the Indemnity Principle. The original County Court Judge ordered the disclosure, but the Appeal Judge held that there was no evidence for a breach in this case. This conclusion is the subject of appeal.

CASE SUMMARY

There was no client care letter in this case as it was indemnified by the union.

Appeal dismissed. The Claimant solicitors were officers of the Court and were bound to not mislead. In signing the bill, they provided proof that the indemnity principle had not been breached. The defendant’s request for disclosure was found once again to be ‘pointless satellite litigation.’

The Judge added that ordinarily, a client care letter should be disclosed with the bill of costs, ‘an ounce of open-ness is cheaper than any argument.’

‘And the other side of a presumption of trust afforded to the signature of an officer of the Court must be that
breach of that trust should be treated as a most serious disciplinary offence.’

Master Rogers

CASE DETAILS
The Defendant appealed against various decisions of a costs officer. The Claimant brought a claim following developing a latex allergy from wearing powdered latex gloves. Liability and causation remained in issue. The Defendant contended that insufficient BTE enquires had been carried out, no notice of funding had been served, the costs officer had been incorrect to allow counsel an uplift when the Claimant's insurance covered own disbursements (including counsel's fees), the costs officer had erred in allowing a grade A fee earner as against a grade B and that the success fee awarded of 82% was excessive.

CASE SUMMARY
• The Claimant was a consultant anaesthetist. The court was satisfied that sufficient BTE enquires were undertaken, but even if they were not,
• The requirement to provide a funding arrangement pre proceedings was optional, so there had not been a breach of Reg.4 ( Metcalfe v Clipson unreported 06.04.04) and therefore the Claimant was not precluded under CPR 43.3B(1)(c) from recovering a success fee for the period to which no notice was given
• In respect of insurance, even if the insurers had been requested to cover counsel's fees, they would not have agreed to cover them
• The grade A rate was appropriate and the inflated rates claimed had been justified in light of the complications of the case
• The success fee of 82% was appropriate for both the Claimant's solicitors and counsel

Hamilton QC

CASE DETAILS
The Claimant appealed a decision to disallow her additional liabilities for failing to notify the Defendant that the Claimant was signed up to a CFA upon the notice of funding. In pre-action correspondence, it had been disclosed that the Claimant had the benefit of a CFA with additional liabilities and an after the event insurance policy. When the claim was issued, despite serving an notice of funding, the same failed to document that the claim was brought under a CFA. Rather than seek relief from sanctions under CPR r.3.9, the Claimant orally applied for the uplift on the basis it was merely a technical error.

CASE SUMMARY
A failure to state in the Form N251 that the claim was being brought under a CFA with additional liabilities was not merely a technical error that could be overcome by showing a lack of prejudice, but was a failure to comply with a mandatory requirement of the CPR.

• The notice of funding required disclosure of any funding agreement and date of the same. This was a mandatory requirement under CPR r.44.3.B. Such rule imposes limits on the recovery of additional liabilities during any period to which the receiving party failed to notify the paying party
• If a litigant was seeking to take advantage of the mechanism for financing litigation through a CFA, it was incumbent on him to strictly comply with the rules

Master Campbell

CASE DETAILS
This case concerned the consequences of not serving a notice of funding prior to the issue of proceedings pursuant to CPR 44.15 and whether the receiving party is barred from recovering a success fee, whether relief from sanctions should be granted and whether the award of a 90% success fee was appropriate. The case concerned dental negligence.

CASE SUMMARY
The obligation on the receiving party to give notification of funding pre -issue is not absolute. The word 'should' in the pre action protocol does not impose such an obligation. On the contrary, the word 'should' should be interpreted as meaning 'ought to' which is not the same as 'has to' or 'must'. Likewise, a step that is recommended under the CPD does not involve any element of compulsion, but instead means favoured.

• The receiving party is not precluded from recovering a success fee under CPR 43.3B(1)(c) for failing to give notice pre issue
• Relief from sanctions would not have been granted as the application was made far too late
• A success fee of 20% was awarded as against 100% claimed and 90% previously allowed

DJ Arkless

CASE DETAILS
The Claimant sought additional liabilities from the Defendant following settling his claim without the necessity of court proceedings. It was common ground that the claimant had not notified the Defendant of the CFA and additional liabilities until the substantive claim was settled. The Claimant submitted that under cPR r44.15 a party was only required to provide information as required by a rule, practice direction or order and as no proceedings had been commenced, he was not required to.

CASE SUMMARY
The requirement to notify the other party of a funding arrangement could be triggered in the absence of proceedings being issued. Therefore a Claimant was required to give notice of any additional costs prior to the substantive decision in order to claim for them.

• It was clear from the protocol practice direction that where a party entered in to a funding arrangement within the meaning of CPR r43.2(1)(k), he 'should' inform the other party. The word 'should' meant 'must'
• The protocol was consistent with CPR r44.3B(1)(c) which stated that a party could not recover additional liabilities if he failed to provide information concerning the funding arrangement
• The claimant was not entitled to relief from sanctions as he had delayed making his application for the same

21/3/2002 CA (Civ Div)

Lord Woolf of Barnes LCJ, Laws LJ, Dyson LJ, Master Hurst

CASE DETAILS

Appeal by the Defendant following an appeal in the Leeds County Court dismissing an appeal from a costs order in the CC. This was a clinical negligence case that settled for £3,000 plus costs. Costs were assessed at £16,784 including VAT. The Appeal raised two points of principle: (i) whether the costs should be reduced if they were disproportionate to the amount claimed in the action; and (ii) whether such costs should be reduced if they were disproportionate to the amount recovered in the action.

CASE SUMMARY

Appeal dismissed. This was due to the majority of costs in the case being incurred pre CPR. The Court would have taken a different view if the costs were incurred post CPR.

Proportionate costs were found to be those that the Claimant might reasonably believe to recover at the instigation of the claim.

Proportionality of defendant costs should be determined by the sum that it was reasonable to believe that the claimant might recover, should his claim succeed.

19/12/2007 Court of Appeal

May LJ, Maurice Kay LJ, Hallett LJ, Chief Master Hurst

CASE DETAILS

The appellant solicitors firm appealed against the 2006 decision that the costs incurred by a firm of costs consultants were a disbursement and therefore not subject to a success fee. The solicitors had been instructed by way of a CCFA to act for a client in a personal injury case. A 45% success fee was claimed on base costs, which were defined under the terms of the CCFA as charges for work done by or on behalf of the solicitor. It was held in the original decision that the costs consultant’s fees were disbursements under the terms of the CCFA and therefore the solicitor was not not entitled to claim a success fee on the same.

CASE SUMMARY

Appeal allowed.

In this case it was decided that the costs consultants work did indeed count as work done on behalf of the solicitor, and therefore were held to be base costs under the terms of the CCFA. As a result, the success fee was to be applied to the same.

Success fees were to compensate solicitors for lost cases. “At the outset the solicitors have to face a risk that their client’s claim will fail, but they may have to conduct costs assessment proceedings on a costs order in favour of the other party for which they will receive no payment.

The cases of Smith Graham v Lord Chancellor’s Department, Stringer v Copley, Cannon v Mid-Essex Hospital Services Trust, KU v Liverpool City Council and Guy v Castle Morpeth Borough Council were discussed in deciding the outcome of this case.

1/8/07 SCCO Master Campbell

CASE DETAILS

This was a CFA case where the issue before the Court was the correct level of success fee to be applied. The Claimant maintained that the case was complicated and warranted a success fee of 100%, whereas the Defendant had offered 40%.

CASE SUMMARY

The Defendant attempted to use a complicated way of illustrating risk, whereas the Claimant relied upon the ready reckoner. The Judge found that the ready reckoner was the usual and simply way of calculating the success fee. The success fee was allowed at 67% as it was held that there was a 60% prospect of success.

9/10/07 Leeds County Court HJ Grenfell & DJ Spencer

CASE DETAILS

This was a fixed cost case involving a low value RTA. The matter was conducted under a CCFA with the Claimant's union. The matter proceeded by way of Part 8. The main issue was whether a 12.5% Success fee was recoverable where the Defendant argued that it was not. The Judge originally found that he did not have discretion to award less than the fixed success fee. The Defendant appealed on this point.

CASE SUMMARY

Appeal dismissed.

Whilst the Judge did not have discretion under CPR Part 45.10, the Claimant did have discretion as to whether to claim a success fee at all.

The Defendants further raised issue with the inclusion of the insurance premium in the sum of £325. The premium was allowed in full.

Paragraph 71 of the Judgement: ‘ It was, in short, entirely reasonable to take that course. I would find it difficult to envisage any circumstances where a Union member would be regarded as unreasonable to have gone to the Union. Just because it is cheaper to the paying party does not make it the only choice and I have no doubt that the Claimant made a reasonable choice.’

9/5/07 Court of Appeal May LJ, Dyson LJ, Smith LJ

CASE SUMMARY

This was an appeal against a county court decision in an RTA case. The appeal was in relation to the success fee claimed at 100%. The matter was governed by fixed costs at 100% as it settled at Trial. The Defendant argued that the success fee should be 12.5% as the Claimant failed to beat their offer at the Trial.

CASE DETAILS

Appeal dismissed

Whilst the Claimant would have been entitled to claim 12.5% had they accepted the Defendants Part 36 offer, the fixed success fees are simply that. This matter proceeded to Trial and therefore 100% was the correct success fee as per CPR Part 45.

‘It is inherent in the scheme that in some individual cases, the success fee will be unreasonably high and in others unreasonably low. But that is the price that has to be paid for achieving certainty and avoiding litigation over the amount of success fees. Rule 44 cannot be invoked to circumvent the careful structure of rule 45 and to undermine its objective of achieving certainty.’

Brooke LJ (VP) Laws LJ, Maurice Kay LJ, Master Hurst (Senior Costs Judge)

CASE DETAILS
The Claimant was a union member who brought a claim for damages for a repetitive strain injury. Such claim was brought under a collective conditional fee agreement. The Claimant's solicitors claimed a success fee of 120% upon their base costs. The Defendant disputed the award of a success fee given the success fee claimed of 120% exceeded the maximum prescribed by the Conditional Fee order 2000 art.4. The defendant claimed that as their had been a material breach of the Order, the Courts and Legal Services Act 1990 s.58 should be applied and the agreement found to be unenforceable.

CASE SUMMARY
A Collective Conditional Fee Agreement that had stated that the successful claimant's solicitors had been entitled to a 120% success fee was a stark departure from, and in breach of, the 100% maximum specified in the Conditional Fee Agreements Order 2000 art.4 that it was unenforceable.

• The 120% risk assessment prepared was a clear breach of the Act and the Order
• If the violation had been treated marginal, the court would have been acting flat against the grain of the legislature's substantial objectives attained by s.58(1), which was to confine within the strict levels specified by rule, the acceptability of the costs arrangements of this nature
• Collective Conditional Fee Agreement found to be unenforceable

Brooke LJ, Rix LJ, Dyson LJ

CASE DETAILS
The appellant local authority appealed a decision that it pays the same success fee (100%) awarded for the detailed assessment proceedings as that allowed for the substantive proceedings. The main decisions to be decided were: a) whether 100% success fee was appropriate for the case 2) whether the CFA allowed contractually for a different success fee for the detailed assessment proceedings to that of the main claim 3) If not permissible under the contract, whether the court had the power under the Costs Practice Direction para.11.8(2) to award different rates 4) Whether the decision of the judge was wrong.

CASE SUMMARY
The court did not have the power under the CPRD para 11.8(2) to direct that a success fee in a CFA was recoverable at different rates for different periods of the proceedings, including detailed assessment proceedings.
• The court was to assess the success fee based on the facts and circumstances that appeared to the solicitor at the time of entering into the CFA. In this tripping accident, 100% was found to be inappropriate. %0% was allowed throughout the proceedings
• The CFA did not allow contractually for the possibility of a different success fee on the detailed assessment proceedings to that of the main claim
• The court had no power to award a different success fee for different periods as detailed in the Costs Practice directions para11.8(2), such direction being wrong.

Brooke LJ, Mance LJ, Longmore LJ

CASE DETAILS
Two appeals made concerning success fees claimed under CFA's in connection with personal injuries sustained following a Road Traffic Accident. In each appeal the CFA had been entered into before 6th October 2003 and therefore fell before the introduction of the fixed costs regime (CPR Part 45 III). Success fees of 50% and 30% respectively were originally awarded, but upon appeal, allowed at 50% and 20%.

CASE SUMMARY
The reasonableness of a success fee, under a CFA entered in to before the introduction of the RTA fixed costs scheme (06.10.03), was to be assessed by reference to what was, or should have been known to the solicitors at the time the CFA was entered in to.

• The guidance for assessing success fees given in Callery v Gray (2002) could be applied by analogy even though the instant cases had been allocated to the multi track and had settled for sums in excess of £15,000.00.
• It is not permissible to adopt the new CPR fixed rates for success fees where the assessment of the CFA is not governed by the new rules
• The uncertainty of the identity of the driver could have been established by a phone call to the police, accordingly, there were no factors which warranted a success fee of more than 20% in the case of Ellerton.

Gibson LJ, Brooke LJ, Tuckey LJ

CASE DETAILS
Following the Claimant entering into a CFA with his solicitor, and subsequently succeeding in his claim, costs only proceedings were issued for recovery of the Claimant's costs. The Defendant argued that: a) as a matter of principle, no success fee should be allowed upon costs incurred in costs only proceedings as there were no risks, b) the figure of 20% awarded was excessive and c) the CFA did not cover costs only proceedings.

CASE SUMMARY
In cases involving Conditional Fee agreements entered into after 1st August 2001 where simple claims such as the instant case settled without court proceedings judges should ordinarily allow an uplift of 5% including costs of any costs only proceedings unless the judge was persuaded that a higher uplift was appropriate.

• The court approved the approach to success fees in costs only cases adopted in Bensusan v Freedman
• On it's proper construction, the CFA embraced the costs only proceedings
• The court rejected the submission that there was no risk in costs only proceedings for which the lawyer acting under a CFA was entitled to seek protection on the principles in Callery (supra)
• 20% awarded for the success fee was reasonable and within the District Judge's discretion

26/11/92 QBD
Brooke J

Only in unusual circumstances would allowances be made for unrecorded time. It must be noted that in this case the vast majority of time was recorded, with just a few estimates from the draftsman, hence an amount of suspicion towards the unrecorded time. Case is also useful for justifying communication with the court.