31 January, 2011
Specialist costs counsel Dr Mark Friston has put together an invaluable guide to the recent decision in MGN v United Kingdom, concerning success fees. He has been kind enough to allow the Legal Costs Blog to host a copy. It can be read: here. One Blog reader, when thanking Mark in advance for this, commented that they did have a copy of Civil Costs: Law and Practice and this briefing note should perhaps be treated as “excellent after sales service”.
It may be that there is less of a delay than previously expected before we see the approach that the English courts may adopt to the MGN v UK decision. Many readers will be familiar with the case of Sousa v London Borough of Waltham Forest  EW Misc 1 (EWCC). That case concerned a claimant who suffered subsidence damage to his property caused by tree roots of a tree owned by the defendant. The claimant’s damage was insured under an insurance policy between the claimant and an insurer. The claimant made a claim upon the policy. The insurer satisfied the claim and exercised its rights of subrogation to bring proceedings against the defendant in the name of the claimant. The claim was brought under the terms of a Collective Conditional Fee Agreement between the solicitors for the claimant and the insurer. The defendant objected to payment of the success fee. The judge as first instance disallowed the success fee on the basis that as the claimant was never at risk of having to pay costs, because he had the benefit of an insurance policy for the loss, it was unreasonable for a CFA to be entered into. The claimant successfully appealed that decision and the success fee was reinstated. The local authority appealed and the hearing recently took place before the Court of Appeal, with judgment reserved. And then there was the decision in MGN v UK. The Court of Appeal has invited written representations (due by last Friday apparently). It appears that the Court of Appeal wants to take the opportunity to take MGN v UK into account when giving judgment. It is quite possible that they might decide they have little scope to “change” English law on recoverability of success fee but suggest that the Supreme Court might. It is then to be hoped that the matter proceeds to that level swiftly.
So what has been the initial response from claimant lawyers to this decision? So far, they seem to fall into two broad groups. The first have suddenly been trying to accept defendants' offers on costs that a couple of weeks ago apparently held no attraction. The second group are simply carrying on as though nothing has happened. It is not clear whether this is simply a robust negotiating stance or whether it is because this group has not yet read or understood the potential implications of this case. I suspect that, at least for some, it is the latter. A quick Google search for the costs firms that appear in the top twenty results for the term “law costs draftsmen” and “costs lawyer” produced only one firm, other than Gibbs Wyatt Stone, that has any mention on their website of this case, notwithstanding a significant number having dedicated news or blog pages. Or maybe their clients are simply not interested.