Success fee cap problems
Barrister Andrew Crouch, writing in Solicitors Journal Bar Focus supplement highlights an interesting problem that will apply equally to barristers and solicitors post-Jackson concerning the operation of the proposed 25% success fee cap based on general damages and past losses:
“lawyers in the post-Jackson reform world are also going to have to get used to asking their successful clients to pay them their success fees from their general damages (enhanced by ten per cent) and past losses. If the matter goes to court, such calculations should cause little difficulty, but surely it is only a matter of time, in a case that settles, before there is a dispute between a lawyer and his client as to the proportion of general damages and past or future losses in the sum agreed and the sum on which the lawyer is entitled to claim his success fee”
As to the related problem that I have raised in the past of whether the 25% cap includes or excludes VAT, Lord Justice Jackson has confirmed that in his view the 25% figure should include VAT. This means legal representatives will actually recover only 20.83%. Jackson LJ does not seem to have commented on whether the 25% cap (or rather 20.83%) should be split between the solicitor and barrister (or barristers) where both are instructed.