Legal Cost Specialists

Costs assessment not a "trial"

The ingenuity of parties to litigation when it comes to arguments over legal costs knows no limits.

The fixed success fee regime which applies to new RTAs allows solicitors a success fee of 12.5% if “the claim concludes before a trial has commenced or the dispute is settled before a claim is issued” or 100% “where the claim concludes at trial”. The same rules, but with different figures, apply to new EL and EL disease cases. A “trial” is defined as being “the final contested hearing or the contested hearing of any issue ordered to be tried separately”.

Some claimant solicitors seeking to maximize their success fees have sought to argue that if a matter proceeds to assessment of the costs then that is a “trial” and their costs therefore attract the 100% success fee even if the substantive claim settles pre-trial. This was the situation that arose in the case of Thenga v Quinn [2009] EWCA Civ 151 (Lawtel link). Judgment was entered in default for the claimant. The matter was listed for an assessment of damages hearing but quantum was agreed before the hearing and the defendant agreed to pay the claimant’s costs. The matter was proceeding in Bury County Court where a practice has apparently developed of cases not being removed from the list but remaining listed to enable a summary assessment to take place. (Considerable doubt was expressed by Lord Justice Wilson as to the appropriateness of this practice given summary assessment is only meant to be conducted by a judge who has heard the actual case.) The case therefore proceeded to a summary assessment where the judge at first instance was persuaded that this therefore amounted to a “final contested hearing” and a 100% success fee applied.

On appeal, the circuit judge disagreed with this conclusion and held that the summary assessment was not part of the “final contested hearing”, the claim had been settled before a trial had commenced and the success fee was limited to 12.5%. Lord Justice Wilson, refusing permission to appeal, agreed with the circuit judge and concluded that it was clear that “final contested hearing” relates to the substantive claim (although would include a disputed hearing as to whether to award a party costs in principle).

This is a sensible decision which slaps down at least one of the perverse outcomes the fixed success fee regime had potentially thrown up.

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