The decision concerned the approach to be taken and the reasonable success fee to be arrived at in regard to an application by the Claimant to escape the fixed success fee provisions within Civil Procedure Rule 45 as in place prior to 2013. The Court below had allowed a success fee for the Claimant Solicitor and Counsel at 65% in place of the fixed level of 12.5%.
The Claimant was a passenger in a car that was involved in an accident on 14th May 2010. The Claimant sustained severe injuries to include a brain injury resulting in a lack of capacity and thus was a protected party in the context of the proceedings. A Conditional Fee Agreement (CFA) was entered in to as between the Claimant Solicitor and litigation friend in July 2010 with a claim intimated against the Defendant. The Defendant was convicted of dangerous driving arising from the accident in June 2011 with liability formally admitted in December 2011. Following a change of litigation friend a second CFA was incepted 20th August 2012, such crucially being post the criminal conviction and formal liability admission. This agreement provided that a success fee would be payable of 25% if the matter settled three months before Trial and would be 100% thereafter. The matter settled within the three month period before Trial such that a success fee of 100% was sought.
The learned Judge acknowledged the lead authority of C v W  EWCA Civ 1459 but concluded that case was not a template for all such matters and there was scope for cases to fall outside the usual, this being one such case. The learned Judge went on to find that the Claimant’s concession to a success fee of 67% was not appropriate having regard to the features of the case, the weighing of liability against causation and the impact upon Part 36 offers. It was held that a success fee of 65% was appropriate to be allowed. That decision was subject to Appeal by the Defendant.
The Appellate Court considered the decision of C v W, acknowledged to be the lead authority on the issue, and the subsequent case authorities in which that decision had been applied. Notably some of those authorities involved the same legal representative for the Claimant, Irwin Mitchell, as was involved in this decision. It was held that a success fee of 100% (as pleaded) could never be justified in a case like the present where liability was admitted with no Part 36 offer made prior to the CFA. It was held there were two fundamental risks in this matter, the risk from the timing of a Part 36 offer (as only costs post 21 days from such an offer would be at risk) and the risk of failing to beat that offer at Trial.
The Appellate Judge considered that the decision below was “plainly wrong” as no attempt was made to analyse the risks which should reasonably have been taken in to account by the Claimant Solicitor when assessing the success fee at inception of the CFA. The decision was therefore to be exercised afresh.
It was held that there was nothing about the case to remove it from the category of standard high value personal injury cases. It was often the position in such cases there were difficult questions of causation or divergent medical opinion.
As to the timing of an offer it was decided that the Claimant could have anticipated the Defendant making an offer relatively late in the proceedings as was the case and is common in such high value litigation. As a result it was considered that even conservatively no more than 25% of the Claimant’s costs would be estimated to be at risk.
As to the risks of beating an offer it was said that given the involvement of an experienced Solicitor and Leading Counsel the risk could not be said to be high and in any event would also be mitigated by the fact that such only applied to 25% of the costs.
The Appellate Court suggested a possible success fee may “at a pinch” have been assessed at 20% but no higher and more likely lower. To escape the fixed success fee the Claimant required allowance of a success fee of 21% or more and therefore the success fee of 100% was reduced by the Court to the fixed level of 12.5% only. Such decision applied to the CFA of Solicitor and Counsel.
This issue continues to have relevance with success fees still being recovered in many catastrophic injury cases owing to their duration and thereby inception of pre 2013 CFAs. Often it is those cases where the damages value permits the Claimant, as here, the ability under the Rules to apply to escape the fixed provision and recovery of a higher success fee. This case re affirms that when approaching the quantification of a success fee the same must be done by analysing the risks to the costs being recovered. Also that complexity should not be confused with risk and that such cases are inherently complex but not necessarily risky.
This is a claim handled by the costs team within Plexus. The decision on the success fee alone results in a reduction of the costs liability to the firm’s client of circa £376,000.
If you would like to know more about this matter, please speak to your contacts at Plexus Law:
Chris White, Technical Director
T: 0113 4681 659 | M: 07557 430 241 | E: firstname.lastname@example.org
Joseph’s Well | Hanover Walk | Leeds | LS3 1AB
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