Six appeals concerned a number of aspects of the new Conditional Fee Agreement.
Held: It should be normal for a CFA, redacted as necessary, to be disclosed for costs proceedings where a success fee is claimed. If a party seeks to rely on the CFA, as a matter of fairness she should ordinarily be put to her election under the Pamplin procedure. The legislation should be given a purposive construction. Parliament did not mean to make unenforceable a CFA which met the requirements to safeguard justice, protect the client, and acknowledge the interests of other parties. The other party has no legitimate interest in avoiding his obligations by seizing on an apparent breach which is immaterial in the context of the other two purposes of the statutory regulation. It should become normal practice for a CFA to be disclosed for the purpose of costs proceedings in which a success fee is claimed. If the CFA contains confidential information relating to other proceedings, it may be suitably redacted before disclosure takes place. Attendance notes and other correspondence should not ordinarily be disclosed, but the judge conducting the assessment may require the disclosure of material of this kind if a genuine issue is raised.
The indemnity principle is now recognised by Parliament: ‘This common law principle, by which a paying party cannot be ordered to pay a receiving party more by way of costs than the receiving party is himself liable to pay, is now enshrined in statute, so far as solicitors are concerned, by section 60(3) of the Solicitors Act 1974, which provides:
‘A client shall not be entitled to recover from any other person under an order for the payment of any costs to which a contentious business agreement relates more than the amount payable by him to his solicitor in respect of those costs under the agreement.’
24. In 1999 Parliament showed itself well aware of the possible application of the indemnity principle in the context of the reforms it introduced in the 1999 Act, because by section 31 it provided:
”In section 51 of the Supreme Court Act 1981 (costs) in subsection (2) (rules regulating matters relating to costs) insert at the end ‘or for securing that the amount awarded to a party in respect of the costs to be paid by him to such representatives is not limited to what would have been payable by him to them if he had not been awarded costs’.
This section, however, has not yet been brought into force. (It will be noticed that these two sections state the principle in different ways, but that need not concern us for the purposes of these appeals.)’
Judges:
Lord Justice Brooke Lady Justice Hale Lady Justice Arden
Citations:
[2003] EWCA Civ 718, Times 10-Jun-2003, Gazette 17-Jul-2003, [2003] 1 WLR 2487
Links:
Statutes:
Access to Justice Act 1999 27, Conditional Fee Agreements Regulations 2000 30
Jurisdiction:
England and Wales
Citing:
Cited – Swain v The Law Society HL 1983
The Solicitors’ Practice Rules had the force of a statute, being rules made by the Council of the Law Society with parliamentary sanction for the protection of that section of the public who might be in need of legal advice, assistance or oversight. . .
Cited – Hughes v Kingston Upon Hull City Council QBD 9-Nov-1998
The Solicitors Practice Rules have the effect of law, and it is still improper to agree to pursue contentious proceedings on a contingency fee arrangement without specific statutory sanction, especially in criminal proceedings. An agreement for . .
Cited – Thai Trading (a Firm) v Taylor and Taylor (of Taylors Solicitors, Caversham) CA 27-Feb-1998
A solicitor had agreed with his wife to act for her in litigation on the understanding that he would only recover his profit costs if she succeeded.
Held: This agreement did not offend public policy. This type of agreement was distinguished . .
Cited – Callery v Gray, Russell v Pal Pak Corrugated Ltd (No 1) CA 18-Jul-2001
Claimants in modest, straightforward personal injury claims cases should have re-imbursed to them by the defendant, the cost of after the event insurance, if necessary by costs only proceedings. The solicitor’s success fee should also be recovered. . .
Cited – Harold v Smith 1860
‘Before stating the principle on which the Master acted on this taxation, it may be as well that I should state what we consider the principle upon which he ought to have acted. I think the question is one of considerable importance, and therefore, . .
Cited – Gundry v Sainsbury 1910
A party’s inability to recover more by way of costs than the amount for which he is himself liable by way of costs is known as the indemnity principle. . .
Cited – General of Berne Insurance Company v Jardine Reinsurance Management Limited CA 12-Feb-1998
Where only part of action for which costs are awarded, is covered by a contentious business agreement, and the amount recoverable is limited, that part is severable from the balance. A paying party cannot be ordered to pay a receiving party more by . .
Cited – Callery v Gray (1) and (2) HL 27-Jun-2002
Success fees and ATE premiums were recoverable
Objection was made to a claimed uplift of 20% sought by the plaintiff’s solicitors. The defendant’s insurers said that there had been little at risk for them.
Held: The system of conditional fees insurance had been introduced to remedy defects . .
Cited – Marckx v Belgium ECHR 13-Jun-1979
Recognition of illegitimate children
The complaint related to the manner in which parents were required to adopt their own illegitimate child in order to increase his rights. Under Belgian law, no legal bond between an unmarried mother and her child results from the mere fact of birth. . .
Cited – Goldman v Hesper 1988
The court has power in costs proceedings to order the receiving party to disclose such documents, orginally to the court, as are necessary to make its decision.
Held: It would be rare to exercise this discretion. . .
Cited – Pamplin v Express Newspapers Ltd 1985
A costs judge does not have any power to order discovery to be given: he does not have any power to override a right of privilege. But he has a duty if the respondent raises a relevant factual issue to require the claimant to prove the facts on . .
Cited – Hazlett v Sefton Metropolitan Borough Council QBD 2-Dec-1999
The need for a party claiming his costs to give evidence to prove his entitlement to costs rather than relying on the presumption in his favour, will not arise if the defendant simply puts the complainant to proof of his entitlement to costs. The . .
Distinguished – Bailey v IBC Vehicles Limited CA 27-Mar-1998
The claimant succeeded in an action for personal injuries. The defendants agreed damages with costs. The claimant was assisted financially by his union. The defendants objected to elements of the bill, and asked for evidence that the bill was not in . .
Cited – Dickinson v Rushmer SCCO 21-Dec-2001
CourtService After strenuously contested proceedings in the County Court for an account the claimant recovered some andpound;18,000, and subsequently submitted a bill for andpound;86,000 odd. The indemnity . .
Cited – Three Rivers District Council and others v The Governor and Co of the Bank of England (No 5) CA 3-Apr-2003
Documents had been prepared by the respondent to support a request for legal advice in anticipation of the Bingham enquiry into the collapse of BCCI.
Held: Legal advice privilege attached to the communications between a client and the . .
Cited – Hodgson and others v Imperial Tobacco Limited Gallagher Limited etc CA 12-Feb-1998
A large number of plaintiffs brought actions against the defendants, three tobacco companies, claiming damages for personal injuries by reason of cancer which they claimed was caused by smoking cigarettes manufactured by the defendants. A hearing . .
Cited – Z And Others v The United Kingdom ECHR 10-May-2001
Four children complained that, for years before they were taken into care by the local authority, its social services department was well aware that they were living in filthy conditions and suffering ‘appalling’ neglect in the home of their . .
Approved – South Coast Shipping v Havant Borough Council 21-Dec-2001
With respect to privileged material produced to the Costs Judge, once a document is of sufficient importance to be taken into account in arriving at a conclusion as to recoverability, then, unless otherwise agreed, it must be shown to the paying . .
Cited – Regina (Factortame Ltd and Others) v Secretary of State for Transport, Local Government and the Regions (No 8) CA 3-Jul-2002
A firm of accountants had agreed to provide their services as experts in a case on the basis that they would be paid by taking part of any damages awarded. The respondent claimed that such an agreement was champertous and unlawful.
Held: The . .
Cited – Regina v Secretary of State for the Home Department Ex Parte Jeyeanthan; Ravichandran v Secretary of State for the Home Department CA 21-May-1999
The applicant had failed to comply with the Rules in not using the form prescribed for appliying for leave to appeal against a special adjudicator’s decision to the Immigration Appeal Tribunal. The application, by letter, included all the relevant . .
Cited by:
Cited – Garbutt and Another v Edwards and Another CA 27-Oct-2005
The client challenged his opponent’s solicitors bill of costs, saying that the other side had not been given an estimate of costs. The solicitor acted on several matters for the client and had not given a formal estmate.
Held: The absence of . .
Cited – Campbell v MGN Ltd (No 2) HL 20-Oct-2005
The appellant sought to challenge the level of costs sought by the claimant after she had succeeded in her appeal to the House. Though a relatively small sum had been awarded, the costs and success fee were very substantial. The newspaper claimed . .
Cited – Gaynor v Central West London Buses Ltd CA 28-Jul-2006
The solicitors appealed a finding that a conditional fee agreement with their client was unenforceable as against their client for failing to meet the requirements of the 1990 Act, which in turn deprived them of a right to claim the costs from the . .
Cited – Jones v Wrexham Borough Council CA 19-Dec-2007
The claimant appealed against a decision that the conditional fee agreement with her solicitors had been unenforceable because the solicitors had not disclosed to her a conflicting interest in recommending insurers. The issue was whether the CFA was . .
Cited – Tankard v John Fredricks Plastics Ltd; Jones v Attrill etc CA 11-Dec-2008
The defendants sought to argue that the conditional fee arrangement used by the claimant’s solicitors had been void under the 2000 regulations. They claimed that the solicitors had failed to disclose an interest in the policies sold.
Held: No . .
Lists of cited by and citing cases may be incomplete.
Costs, Legal Professions
Updated: 07 June 2022; Ref: scu.182358