Legal Cost Specialists

Motto & Others v Trafigura – Court of Appeal

Court of Appeal judgment in Motto & Others v Trafigura [2011] EWCA Civ 1150 out.  Summary of leading judgment:

“i) Proportionality: I would allow the defendants’ appeal, and would hold that it follows that any item on the Bill is only to be allowed if it was necessary;

ii) Vetting costs: I agree with the Judge’s conclusions, save that the necessity test must be satisfied before any item is recoverable, and any specific (as opposed to generic) item can only be recovered if it falls within the grasp of the relevant claimant’s CFA;

iii) Pre-Action Protocols: I would dismiss the defendants’ appeal against the Judge’s finding that there should be no disallowance or reduction in respect of any sum claimed in the Bill on the ground of the claimants’ failure to comply with any protocol or the PDPAC;

iv) Medical reports: Subject to the point that the cost of these reports should not be recoverable if it was unnecessary to obtain them, I would uphold the Judge’s conclusion on this issue.

v) Abandoned claims: Subject to satisfying the requirement of necessity in relation to an item, the claimants can recover costs in respect of the “abandoned claims” in so far as it was reasonable and proportionate to plead, investigate and pursue them;

vi) Settlement and distribution: I would uphold the Judge’s conclusions, save I would discharge his imposition of the 26 October 2009 cut-off date;

vii) Cost of funding: Contrary to the Judge’s conclusion, I do not consider that the claimants can recover the costs of preparing and advising on the CFAs, nor do I consider that they can, recover any costs incurred in discussing the litigation with,, or taking instructions from, with the ATE insurers;

viii) Success fee: I would uphold the Judge’s determination of 58% uplift for both Leigh Day and counsel;

ix) ATE premium: I would uphold the Judge’s decision to fix the premium of £9,677,554 by reference to a 65% prospect of success.”

Much to mull over.  Something for claimants and something for defendants.

5 thoughts on “Motto & Others v Trafigura – Court of Appeal”

  1. “Something for claimants and something for defendants”

    hmm, seemed to have missed what is in it for Claimants there

    They introduce complicated legislation, to force Claimants solicitors to fund litigation instead of the Government (Legal Aid), but now say (1) solicitors cant recover that cost, and (2) they cant even get interest until going through what is often an even more contested and drawn out process

    Where is the Law Society in all this? Are they not supposed to voice their support of their own professional members?

    Lets await the ban on referral fees (which will remove most firms marketing ability) and the Small Claims Track increase ( see the Law Gazette) and the rapid closing of many firms, before perhaps someone will take note of the damage they are doing to the profession.

    And, oh, those Defendants out their revelling in this. Who will need your services when there are no firms to bring claims?

  2. Seems to me that, on the points that related factually to the Trafigura case, the claimants were overwhelmingly the winners, but on the wider points of principle the case is more attractive to defendants. On funding, the killer for CFA costs was exactly the point I have previously predicted on this site, rather than all the claptrap spouted by defendants about Hunt v Douglas Roofing and various ludicrous first instance decisions. The problem for solicitors is the indemnity principle, not some arcane rule of law. How can you charge a client for putting your own contract in place?

    The point on ATE costs is less convinving – why are these costs not “incidental” to the litigation? The MR (who knows nothing about costs) does not appear to be aware of the long established principle that the costs “of” a claim include the costs incidental to it.

    Lastly, Anon – you need to read the judgment. They said nothing about interest. The appeal on that is up for Jan 30th. And Master Hurst did, in effect, say that interest in generally recoverable. He disallowed it in this case on purely case specific grounds.

  3. jacques, I speak from the experience of Assessments. Ive yet to find a DJ allowing interest on the basis of the current crop of judgements. I am fully aware of Master Hurst’s comment about general recoverability, and requiring a special order to displace recovery. And on every single assessment, the DJ’s are making that exact Order

    Your point about the indemnity principle is bad. Discussing a clients options as to how to pay, are as relevant to any other aspect of advice given to a client – in fact, costs is simply another head of “damages” sought by the client, hence why every Particulars of Claim sets out the clients claim for general damages, special damages, AND COSTS.

    Moreover, the CFAR adds an additional layer of works requirement for a solicitor, which simply otherwise does not exist with private or LEI retainers. Why should the Government introduce such onerous legislation, then the Courts remove the ability to charge for it! Not only do the majority of claimant solicitors now have to fund the cases they run, they also now lose at least 1-2 hours of work per case, and that is before coming up against obtuse Defendant negotiators without qualification nor legal background, who claim every case should be dealt with by the equivellant of the office tea boy in no time at all!

  4. This is what you get when senior judges are on the list of Lloyd’s names!

    When I did legal aid work I always got paid for advising the client about funding, it was called a Green form.

    As for charging the client for putting a contract into place, lets not forget that most CFA’s not only protect the Client from their own solicitors costs but also the opponents when ATE is added.

    The Judge was clearly wrong in his approach to communications with LEI. After all a solicitor must obtain authority from the Client to incur an expense or take a ‘risk’. Where the LEI indemnifies,such authority must be sought from them.

    It seems to me that all that will happen is that Claimant Bills will show no LEI correspondence, but a wealth of Claimant correspondence instead!

  5. BTE insurer’s demands are some of the most draconian demands I have ever seen with ever increasing circles to run through. It take a 2-page letter just to get a get a £3000 increase in funds for cover that the client has in reality pre paid for

    the Motto judgment makes the whole thing unworkable given the increasing barriers that BTE insurers put in place

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