Success Fees: Has Your Trial 'Commenced'?
Whether or not your Trial is deemed
to have commenced can have a significant impact on the level of success
fee which you can recover, particularly where the percentage uplift is
fixed by the CPR.
Where a claim1 arises following a Road Traffic Accident2, an Employer's Liability3 or an Employer's Liability Disease matter4 and a Conditional Fee Agreement5
has been entered, the successful party is often entitled to recover a
success fee. The amount which can be recovered from the Paying Party is
fixed by Part 45 of the CPR.
The following table shows the fixed
success fees which can generally be recovered by Solicitors at the
different stages of a claim:
Solicitor's Fixed Success Fee Table
|
Type of Claim
|
Settlement Achieved
Prior to Trial
|
Settlement Achieved after Trial Commenced or by Judgment
|
|
CFA
|
CCFA
|
|
Road Traffic Accident
|
12.5%
|
12.5%
|
100%
|
|
Employer's Liability
|
25.0%
|
27.5%
|
|
Employer's Liability Disease – Type A
|
27.5%
|
30.0%
|
|
Employer's Liability Disease – Type B
|
100%
|
|
Employer's Liability Disease – Type C
|
62.5%
|
70.0%
|
The following table shows the fixed success fees which can generally be recovered by Counsel at the different stages of a claim:
Counsel’s Fixed Success Fee Table
|
Type of Claim
|
Pre
Allocation
|
Fast Track
|
Multi Track
|
Settlement afterTrial Start/by Judgment
|
|
More than 14 days to Trial
|
Less than 14 days to Trial
|
More than 21 days to Trial
|
Less than 21 days to Trial
|
|
Road Traffic Accident
|
12.5%
|
12.5%
|
50.0%
|
12.5%
|
75.0%
|
100%
|
|
Employer's Liability
|
25.0%
|
25.0%
|
50.0%
|
25.0%
|
75.0%
|
|
Employer's Liability Disease - Type A
|
27.5%
|
27.5%
|
50.0%
|
27.5%
|
75.0%
|
|
Employer's Liability Disease – Type B
|
100%
|
|
Employer's Liability Disease – Type C
|
62.5%
|
62.5%
|
62.5%
|
62.5%
|
75.0%
|
There are exceptions to the fixed
success fees, and an application can be made for an alternative
percentage increase in limited circumstances6,
however, be careful because sanctions can be applied in the event that
the success fee fails to be assessed at sufficiently higher/lower than
the fixed fees!7
Part 45 of the CPR dictates that a
reference to a claim concluding at Trial is a reference to a claim
concluding by settlement after the Trial has commenced or by Judgment;
however, issues have been caused by the terminology in respect of a
Trial being 'commenced', particularly when settlement is achieved just
before the case starts.
The following cases are useful to consider when contemplating whether your Trial will be deemed to have started:
Amin & Anor v. Mullings & Anor [2011]11
-
Court: High Court of Justice, Queen's Bench Division: Birmingham Civil Justice Centre
-
Judge: Mrs Justice Slade DBE
-
Circumstances: the
Claim involved a Road Traffic Accident to which Part 45 of the CPR
applied. The Claimants had originally initiated the Claim following the
accident and the Defendant had counterclaimed. Liability was in dispute
with each party blaming the other. Eventually a 50/50 split on liability
managed to be agreed between the parties. Prior to the Trial
commencing, the Claimants settled their claim on both the issues of
liability and quantum. The Defendants had settled their counterclaim bar
the issue of the hire vehicle which was determined by the Court. The
Defendant appealed the cost decision of the Recorder to allow both
parties 100% success fee.
Considerations: it was clear that the
Defendant was entitled to a 100% success fee on both the Solicitor's and
Counsel's fees of the counterclaim. Consideration was given to the
definition of 'Trial' and whether it had 'commenced'. Furthermore,
consideration was given to the nature of the Claimant's claim in
relation to the Defendant's counterclaim and whether the counterclaim
was a distinct and separate claim. Both the cases of Sitapuria and
Dahele were considered.
-
Held: the language of
CPR 45.17(1)(a) was found to be the same as that of CPR 45.16(1)(a).
There was no reason to distinguish it from the clear meaning of that
provision. A 100% uplift to Counsel’s fees applied where the claim
concluded by settlement after the Trial has commenced or by judgment. It
did not apply where a settlement was reached before the Trial commenced
even if it was achieved on the date fixed for the trial. The Judgement
in Sitapuria was approved whilst that in Dahele was not followed.
Additionally, the fact that the counterclaim was determined at Trial did
not mean that the claim should also be regarded as determined at Trial.
The Claimant's success fees were reduced accordingly.
Gandy v King [2010]10
-
Court: SCCO
-
Judge: Master Haworth, Costs Judge
-
Circumstances: the
case involved a road traffic accident which occurred in 2001. The
Claimant was 17 at the time of the accident and due to the injuries
sustained was considered to be a patient, requiring a litigation friend.
Whilst the case was not one where the success fee was fixed by the CPR,
it is still important due to the consideration given to the
construction of the CFA and definition of the term “concludes at Trial”.
At the very start of the Trial, Counsel for the Claimant requested that
there be an adjournment, which was granted. The parties had agreed
settlement in the sum of £5,900,000.00. After the adjournment, the
settlement was approved by the Court. The Claimant claimed that the
success fee ought to be the maximum of 100% allowed under the terms of
the CFA since the matter concluded at Trial.
-
Considerations: the
Judge considered that the word 'Trial' denoted an examination and
determination of issues between the parties by a Judge or some other
tribunal. Both Dahele and Sitapuria were distinguished because they
dealt with the fixed costs regime which did not apply to the facts of
the case. The risks of the claim were considered along with the
principles in C v W [2008] EWCA Civ 1459. Liability had been admitted
prior to the CFA being entered and the risks were relatively low which
justified a lower success fee.
-
Held: an Approval
settlement did not fulfil the criteria of a 'Trial'. The Trial had
therefore not commenced and the Claimant was not entitled to the 100%
success fee within the CFA. The success fee was reduced to 20%.
Sitapuria v Khan (2007)9
-
Court: Liverpool County Court
-
Judge: His Honour Judge Stewart, Q.C.
-
Circumstances: the
claim involved a Road Traffic Accident where settlement occurred just
prior to the Trial being opened. The fixed success fee regime under Part
45 of the CPR applied.
-
Considerations: the
Court considered the case of Dahele and disagreed with Master Haworth's
interpretation of the Rules. There was no purported lacuna when
consideration was given to the fact that the Rules depicted the start of
the period for each level of success fee and not the end. Additionally,
it was clear that the Court considered that any perceived lacuna should
not be used to interpret the clear provisions in relation to
Solicitors.
-
Held: the Trial was
not considered to have 'commenced' and therefore the Solicitors and
Counsel were not entitled to the 100% success fee. To successfully claim
a 100% success fee in accordance with the Rules, the case needs to have
been opened as a contested Hearing.
Dahele v. Thomas Bates & Son Limited [2007]8
-
Court: SCCO
-
Judge: Master Haworth, Costs Judge
-
Circumstances: the
claim involved an employer's liability claim where the success fee fell
to be fixed under Part 45 of the CPR for both Solicitors and Counsel.
The claim settled on the “doors of the Court” as it were and the
Claimant contended that the full 100% should be claimed for both
Solicitor and Counsel which was disputed by the Defendant.
-
Considerations: the
Court considered the definition of the Trial commencing and the
purported potential lacuna in respect of Counsel's fees. Consideration
was given to the fact that if the claim settled 21 days or less before
trial, Counsel would get 75% whereas if the claim settled after the
Trial had officially commenced, the success fee would be 100%. The
calculations did not include the day of Trial itself. Therefore between 1
minute past midnight on the day fixed for Trial and the opening of the
Trial, no percentage uplift was stipulated for Counsel. Therefore, logic
dictated that the draftsman of the CPR would not have intended this
apparent lacuna and therefore the Trial would be deemed to have
commenced on the date fixed for Trial.
-
Held: Both the
Solicitor and Counsel were entitled to 100%; the Trial had commenced
with the approval of the settlement terms by the Court after the time
for the Trial's start had been set. It was considered that the Defendant
could have made their offer earlier and/or the Court could have not
approved the settlement and requested that the parties step out,
requiring them to re-negotiate.
Whilst it is clear that there is a slight divergence of judicial views on the matter, it would seem that it certainly leans towards a Trial having to be properly opened for the determination of an issue if a party is to be successful in recovering 100% success fee under the fixed costs regime.
1 Which is not a claim which would be allocated to the Small Claims Track
2 Where the accident occurred after 6th October 2003 and Sections II and VI of Part 45 do not apply
3 Where the accident occurred after 1st October 2004
4 Where the letter of claim containing a summary of the facts on which the claim has been based was sent after 1st October 2005
5 As per the definition contained within Rule 43.2(1)(k)(i) of the CPR
6 See Rule 45.18 for Road Traffic Accidents, Rule 45.22 for Employer's Liability Claims and Rule 45.26 for Employer's Liability Disease Claims.
7 For further information, please see our article: Success Fees: How Fixed Are You?
8 EWHC 90072 (Costs)
9 Unreported, 10th December 2007
10 EWHC 90177 (Costs)
11 EWHC 278 (QB)