KU (a child, by her mother and litigation friend PU) -v- LIVERPOOL CITY COUNCIL

This case considered whether a success fee of 100% was appropriate and secondly whether or not the Court had the power to direct that a success fee is recoverable at different rates for different periods of the proceedings.

This was an appeal by the Defendant against an Order of Judge Stewart QC whereby he allowed an appeal by the Claimant against an Order of District Judge Humphreys-Roberts. The District Judge ordered that the costs of the action were agreed at £5,500.00 and he made no order for costs in the Detailed Assessment save for payment by the Defendant of the issue fee. Judge Stewart QC substituted an Order that the Defendant pay the costs of the Detailed Assessment totalling £8,700.00.

The District Judge held that a success fee of 100% was reasonable until the defence was filed, but thereafter the success fee should be reduced to 5% for both the substantive proceedings and the Detailed Assessment proceedings. On appeal Judge Stewart held that the District Judge had no power to reduce the success fee and he therefore allowed a success fee of 100% throughout.

The Claimant was 4 years old at the time of the accident. She was walking along a grass verge when she stepped into a hole hidden in the grass and cut her leg.  A site inspection report was obtained and a risk assessment was undertaken, measuring the chance of success at 50% and estimating the value of the claim to be £750.00. The success fee was set at 100% having considered the Claimant’s statement, any potential s.58 defence, the lack of clarity as to the appropriate Defendant, the likelihood of a dispute as regards contributory negligence, the likelihood of a dispute as quantum and Callery v Gray.

The Claimant’s solicitor relied upon the risk assessment, research carried out by APIL which stated the success rate for public liability claims was generally 61%, which justified a success fee of 64% using the Cook on Costs matrix, and an article in the Daily Mail which said only 20% of public liability cases succeed against Liverpool City Council.

It was held that this was not a typical tripping case but the identification of the Defendant should not have been so complex and the likelihood of a defence proving to be successful was not very high. Also, in a claim as small as this the Court held that it was not reasonable that a Defendant should have to pay a higher success fee against the risk that the value of the claim was so low that costs would not be recovered at all. This was a risk to be borne by the Claimant’s solicitor. Thus it was held that a 50% success fee would have been appropriate.

As regards whether or not the Court had the power to award a success fee at different rates, it was held that the Court did not have the power to do so. The Claimant’s solicitor did not have the contractual power or the professional duty to re-negotiate the success fee once it became clear that the risks were small, and the Court did not have the power to order that a solicitor was only able to recover a lower success fee in respect of some later period where the level of success fee was reasonable at the time it was set.

ABREW -v- TESCO

The Claimant was pensioner who had visited the Defendant’s store to do some shopping when she slipped on some dried spaghetti on the floor of one of the aisles. She was taken to the first aid room and the accident was entered into the accident book.

The Claimant contacted solicitors, Messrs Howe & Co, and entered into a CFA which provided for a 100% success fee. An After-the-Event insurance policy was also taken out. Pre action communication was entered into, liability was admitted 12 days outside of the protocol period and the claim settled for the sum of £3,500.00.

As costs could not be agreed, Part 8 proceedings were issued and the Detailed Assessment hearing was heard by Costs Officer Worthy. The Bill of Costs totalled £8,882.00 and the costs were assessed at £4,862.47, only 54% of the costs claimed.

The Defendant appealed on three issues, one of which was the success fee. Costs Officer Worthy had reduced the success fee of 100% claimed within the Bill to 50%. The Defendant was willing to concede a success fee of 20% but argued that it should be lower following the case of Halloran v Delaney.

The Claimant argued that he was faced with a slipping case where there was some supporting evidence, but it was by no means certain that the Defendant would not have been able to put up a strong defence on the basis that they cleaned the floors regularly, and therefore the case could not be equated with minor RTA type cases.

On appeal Master Rogers held that in assessing the success fee each case has to be looked at on its own facts and this was not a straightforward RTA case. He held that a success fee of 50% was reasonable given the knowledge that the Claimant’s solicitor had at the time the risk assessment was undertaken.

Failing to better a Part 36 payment – Is it mandatory where a claim concludes at trial that there be 100% success fee uplift?
TONY LAMONT -v- JAMES BURTON
 
The Claimant in this matter was injured in a Road Traffic Accident. He instructed solicitors under a Conditional Fee Agreement and took out after the event insurance. The Defendant admitted liability. Proceedings were issued and no defence was filed. A Part 36 payment in the sum of £1,800 was made but was not accepted. A ‘disposal hearing’ was conducted and the Claimant was awarded damages of £1,774.32. In relation to costs, the Defendant argued that the Claimant should have accepted the Part 36 payment within the time for acceptance, and that had he done so, the claim would have concluded before the trial so that the percentage increase for solicitors’ fees prescribed under CPR 45.16 (i) would have been 12.5%. Accordingly, it was submitted that the judge should exercise his discretion to allow the Claimant an uplift of only 12.5%. The Judge had awarded the Claimant costs up until the latest date on which the Part 36 payment could have been accepted without the permission of the Court, making a summary assessment which included a sum representing the base costs and a success fee of 100% 
 
The Defendant appealed to the Judge on the ground, inter alia, that the Judge was wrong to consider himself bound by CPR 45.16 (a) to award a success fee of 100%. The Defendant argued that although CPR 45.16 did not itself give the Court jurisdiction to allow a different percentage increase, it contained a lacuna in that it did not deal with situations in which a Claimant failed at trial to better a Part 36 offer.
 
The appeal was dismissed. While there might well be a case for deciding that where a Claimant failed to better a Part 36 offer or payment he should only be allowed the same success fee as he would have recovered had he accepted it, this was not the effect of the CPR. The Court could not use rule 44 to circumvent the mandatory rules of CPR 45. However when read together, CPR r.44 and r.45 did not have that effect. Moreover, there was nothing in the language of the rules that required the Court to allow a 12.5% success fee where a Claimant had failed to better a Part 36 offer or payment, and the Appellant did not seek to argue that r.44 could be invoked to award a reasonable success fee in cases to which Part 45 III applied.

ATACK -v- LEE

The case concerned a Road Traffic Accident where a motorcyclist claimed that his injuries were sustained when the Defendant drove his lorry negligently on a roundabout. The Claimant claimed that the Defendant lorry was wrongly positioned on the roundabout and was not signalling, causing the Claimant to take evasive action. In doing so, he touched the kerb and lost control of his motorcycle. There was no contact between the two vehicles. The Claimant was supported in his version of events by his father and a family friend who witnessed the accident.

The Claimant entered into a private retainer with his solicitor and liability was subsequently denied. The Defendant went on to produce a witness statement of a witness who they said was an off duty policeman and who supported the Defendant’s case. The Defendant wrote a without prejudice letter confirming they strongly disputed liability, upon receipt of which the Claimant entered into a CFA. The Claimant’s solicitor stated that other factors influencing him to enter into a CFA were his perception of the Claimant as an unreliable witness and the lack of independent witnesses for the Claimant.

The action went to trial and the claim was only settled after the trial judge had made his ruling on liability.

An issue arose during the Detailed Assessment of the Claimant’s costs as to the appropriateness of the success fee claimed. The Claimant claimed that a success fee of 100% as set out in his CFA was reasonable but Deputy District Judge Elsey held that it should be reduced to 50%. The Claimant appealed but on appeal Judge Butler QC refused to interfere with the Deputy District Judge’s assessment.

It was found that the Claimant’s solicitor’s risk assessment was of little use in providing an insight into his assessment of the risks at the time as various factors were of relevance to the risk such as value of the claim and the likely duration of the claim. The risk assessment was therefore put to one side and the success fee was assessed on the basis of what a reasonable solicitor would have assessed the risks to be at the time. On this basis it was held that a success fee of 50% was reasonable and the appeal was dismissed.