The defendant costs specialists

APIL/PIBA 6

By on Aug 29, 2013 | 4 comments

A large number of current CFAs with Counsel in personal injury cases are governed by the APIL/PIBA 6 model agreement. This provides:

“If the amount of damages and interest awarded by a court is less than a Part 36 payment into Court or effective Part 36 offer then:

1) if counsel advised its rejection he/she is entitled to normal and success fees for work up to receipt of the notice of Part 36 payment into Court or offer but only normal fees for subsequent work;

2) if counsel advised its acceptance he/she is entitled to normal and success fees for all work done.”

What costs are payable in the event Counsel was not advised a Part 36 had been made and the therefore did not advise one way or the other on the offer, which is subsequently not beaten?

On the face of it, there is a lacuna in the wording.

The problem should not arise, in theory, because the agreement, under the heading “Obligations of the Solicitor”, states the solicitor agrees:

“promptly to bring to counsel’s attention … any Part 36 or other offer to settle”

But what if the solicitor forgets?

The agreement states:

“Counsel may terminate the agreement if … Counsel discovers that the solicitor is in breach of any obligation [under “Obligations of the Solicitor]”.

In the event of termination in this situation the agreement provides:

“(1) If counsel terminates the agreement under paragraph 6 then, subject to sub-paragraph 2 hereof, counsel may elect either:

a) to receive payment of normal fees without a success fee which the solicitor shall pay not later than three months after termination: (“Option A”), or

b) to await the outcome of the case and receive payment of normal and success fees if it ends in success: (“Option B”).”

But, if the breach is not discovered until after the claim has settled, can Counsel still terminate the agreement?

    4 Comments

  1. is that not a matter for their compliance officer?

    In terms of attacking the success fee the question of what costs would be payable is taking into account hindsight – you have to assume that the solicitor will advise of the Part 36 and accordingly counsel has no Part 36 risk and the sucess fee should be adjusted accordingly. They would be doomed if liability already entered pre CFA – Haines v Sarner territory I would say

    annon

    29th August 2013

  2. Counsel in that case should sue the solicitor for breach of contract and negligence

    termination is not a realistic option, as it would disadvantage Counsel in terms of recoverable success fees

    the key word is “may”. its not automatic. Counsels rights in breach of contract and negligence are fully preserved

    interesting question tho Simon – its happened many times in files Ive seen now I think on it. The fact is however, Counsel wont ordinarily sue, to preserve the status quo with their solicitor (assuming theres an ongoing relationship) or Chambers (on the same assumption).

    Anonymous

    29th August 2013

  3. Surely simple question of ICS v West Brom objective construction.

    Purpose of the clause is that if counsel has advised on an offer, recommended its rejection, but then client fails to beat it, he shares the pain and gives up his success fee.

    If he hasn’t (either because denied the chance (the bit the CFA is silent on) or because he advised its acceptance (the bit expressly covered))then why should he share the pain? He gets normal fees plus success fee.

    Doubt any judge (at least one familiar with contract, so we can rule out some of the costs judges, but that’s why we have appeals) would have much difficulty with that one.

    No need for counsel to sue anyone or terminate the contract. The clear objective construction entitles him to payment. If the solicitor messed up, then he may have to bear the extra cost himself, but that’s another issue.

    anon

    29th August 2013

  4. I once dealt with a claim where counsel terminated his CFA before the determination of the claim but purported to postpone his election until after the determination!

    Timothy P

    5th September 2013

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