The defendant costs specialists

CFAs

Automatic 100% success fees banned

By on Apr 4, 2019 | 2 comments

For many years, a large number of personal injury solicitors have automatically charged their clients a 100% success fee regardless of the risks of the case.  This has been a standard business model for many firms, with the reasoning being that this will usually lead to an automatic 25% cut of the client’s general and existing financial damages (as a result of the cap on the level of success fee in personal injury claims) in addition to any costs recovered from the other side. The Court of Appeal has now held, in the case of Herbert v H H Law Ltd [2019] EWCA Civ 527, that this will normally be inappropriate and that any success fee should reflect the actual risks in the case (here held to be 15% for a straightforward RTA) unless the client has given “informed consent”. In terms of CFAs already entered into, this decision is likely to open the floodgates to solicitor/own client challenges. Going forwards, it is likely to be an uphill struggle, when entering into new CFAs, to show that the average lay client has given informed consent to a success fee that does not fairly reflect the risks of the case. For a detailed summary of this decision, see Robin Dunne’s, junior counsel for the respondents in the appeal, article.  This also deals with the important issue of whether an ATE premium is a disbursement that needs to be included within a statute...

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Faisel v Lancashire County Council – Administration of solicitors

By on Aug 10, 2012 | 7 comments

The other day I posted a link to a website showing some case summaries of various first instance decisions. One angry reader commented: “I’m surprised this is publicised on the blog as useful case summaries – will we now all be submitting every DJ decision and taking it as Gospel?” I see no reason to interfere with the long-established tradition amongst law costs draftsmen and costs lawyers to treat a decision made late on a Friday afternoon by a Deputy District Judge, sitting in Worthing County Court, on the appropriate grade of fee earner to allow in a public liability tripping claim, as being binding on all other members of the judiciary for similar claims. Indeed, surely there is no need to even produce a copy of a judgment or transcript, one can simply tell a judge that: “Costs Officer So-and-So always allows me a rate of £200 per hour for this type of case” and the judge will be obliged to allow the same. Of course, aside from the issue of whether first instance decisions are binding or not, there are often no higher authorities on a given issue of costs law. Therefore these decisions can often throw useful light on the various arguments that can be run, and a well delivered judgment can provide an extremely helpful summary of what can otherwise be quite complex issues. With the above in mind, here is a link to the interesting decision in Faisel v Lancashire County Council, Preston County Court (25 May 2012) concerning the situation where the original firm of solicitors ceases to act following them going into administration. Where they are acting under a CFA, are their costs recoverable at the conclusion of a case? This issue usually comes down to a question of analysis of the terms of the CFA that deal with termination of the agreement before the successful conclusion of the claim and how the Court determines the agreement was ended. Here the District Judge appears to have concluded, although not exactly expressing himself in these terms, that it was the decision of the Claimant to terminate the original agreement (notwithstanding the fact that the original solicitors were already in administration), and the terms...

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LASPO amendments overturned

By on Apr 19, 2012 | 5 comments

The government has, unsurprisingly, overturned all of the House of Lords amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill and, in particular, the one that sought to exempt all EL industrial disease cases from the end to recovery of success fees and ATE premiums. It is a perfectly arguable position to adopt that all claimants should be allowed to litigate entirely risk free and keep 100% of their damages. It is also perfectly arguable that injuries of a certain level of seriousness should be exempt (eg those that will, or have, resulted in death). However, the position of the House of Lords’ amendment to exempt all EL disease claims (and why not non-EL disease claims?) was neither rational nor consistent with whatever it was that was trying to be achieved (unless it was simply pandering to the trade...

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Article on CFA challenges

By on Apr 16, 2012 | 6 comments

Readers of Solicitors Journal will know I contribute a regular costs column. Somehow I usually manage to find something new to write about that hasn’t already appeared on the Legal Costs Blog. As part of our Costs Law Articles Archive project I will be uploading some of these old articles over the coming weeks. First up is a discussion of the Tankard v John Fredricks Plastics Ltd [2008] EWCA Civ 1375 judgment and whether it would kill off CFA challenges. In the article I wrote: “Although a collective sigh of relief will have gone up from panel members of the ALP scheme the decision has done little or nothing to limit the scope for challenges to other schemes or introduce any greater certainty. Hollins introduced the vague (and often shifting) concept of the ‘material’ breach and Tankard has introduced the even more unhelpful ‘reasonable person’ test. Although this appears to represent a common sense approach it actually produces nothing but uncertainty. If you asked the ‘reasonable person’ whether he thought that a scheme that provided only 1% of a firm’s revenue might affect the advice it gave then the answer would probably be no. If you informed the same person that an interest amounted to £50,000 a year you would possibly get an entirely different answer. Of course, it is quite possible that 1% of a given firm’s revenue is indeed £50,000 a year. Would two judges give the same answer to this set of facts? Equally, £50,000 for some firms really would be irrelevant but for others would represent the difference between profit and loss. This new test will mean that there may have been a breach of the Regulations by one firm when advising a client but no breach by the firm next door giving exactly the same advice on the same scheme.” Having recently had a CFA challenge upheld on appeal, and with one or two others still in the pipeline, I am sticking by the view that Tankard did not kill off CFA challenges but simply made the outcome more...

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"No" to entity regulation for costs firms

By on Mar 27, 2012 | 2 comments

Today I continue my examination of the calls for the Costs Lawyer Standards Board (CLSB) to introduce entity regulation of costs firms, in light of the decision in Kynaston v Carroll [2011] EWHC 2179. There appear to be two further arguments as to why entity regulation is required. The first one is that if Costs Lawyers can delegate their rights of audience to non-Costs Lawyers there is a danger that many costs firms will decide there is no need, or advantage, to employing a large number of Costs Lawyers. They will only need one Costs Lawyer per firm to enable them to exercise all the rights of Costs Lawyers. The number of those paying for a Costs Lawyer practicing certificate will rapidly decline and a disproportionate burden will be carried by the few remaining. (It would be pure speculation as to how many of those who recently joined the Association of Costs Lawyers joined on the back of rights of audience concerns pre-Kynaston.) Therefore we need entity regulation to cover the costs of Costs Lawyer regulation. This argument, I suspect, places too much weight on the advantages that come with Costs Lawyers’ “rights”. There are a significant number of Costs Lawyers who work in-house for solicitors. They have never needed Costs Lawyer’s rights (beyond possibly costs appeals, which I doubt are utilised other than in the rarest of cases). Equally, there are those who do only Legal Aid work and never use their “rights”. Costs Lawyer status must therefore be viewed by many as having a value beyond the rights that come with it. In similar fashion, the number of practising solicitors continues to spiral ever upwards despite much of the work done by solicitor firms not being regulated work and despite the fact that much litigation work is indeed done by unqualified paralegals acting under the supervision of a single qualified solicitor. Again, the perceived benefits of being a qualified solicitor appear to go beyond the rights that go with it. Now that Kynaston has established that detailed assessment hearings are “in chambers” and anyone may attend if properly instructed by an authorised person, the rights of audience that come with Costs Lawyer status are of limited value....

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Retrospective revocation – Revisited

By on Mar 13, 2012 | 3 comments

The proposed amendment to the Legal Aid, Sentencing and Punishment of Offenders Bill that I discussed yesterday has been causing no end of fuss (understandably) with at least one expert commentator advising against signing a client up to a CFA until the Bill is in its final form. However, further analysis of the proposed amendment has led most commentators to come round to the view that, if implemented, it will not render success fees irrecoverable if a matter is not settled prior to April 2013 (see this analysis for the current line of thinking). It appears that the amendment is actually intended to catch CCFA claims once the implementation date is reached. In other words, the amendment is necessary to stop success fees in CCFA cases being recovered where work begins after April 2013. It will not be possible, under this amendment, to claim a success fee is recoverable simply because the original CCFA pre-dates April 2013. It does seem rather bizarre that it has only just been appreciated that CCFA cases might not have been caught by the Bill as originally drafted. (What else is being overlooked?) As to this amendment, as I mentioned yesterday, “this could have been worded considerably more clearly”. I think we can all agree on...

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