100% success fee model in low value personal injury claims shut down by Court of Appeal

15%

The Court of Appeal has upheld the decisions of District Judge Bellamy (first instance) and Soole J (on appeal) that a 100% success fee in a low value personal injury claim which was fixed without any reference to the actual risk involved amounted to a cost of “an unusual nature or amount” under CPR 46.9(3)(c).

Accordingly, it was not recoverable in the context of an assessment under s70 Solicitors Act 1974 in the absence of informed express or implied approval in accordance with CPR 46.9(3)(a) and (b) “in the sense that the approval was given following a full and fair explanation to the client”.

“informed approval would require that HH clearly explained to Ms Herbert before she retained HH that, in providing for a 100% uplift (subject to the 25% cap), HH took no account of the risk in any individual case but charged that as standard in all cases.”

The success fee had been reduced to 15% by DJ Bellamy who observed that “the facts of the case were straightforward, the nature of the injury was minor soft tissue damage and whiplash, there was no time off work, and it was likely that the case would be settled for a modest amount in a short period of time.”

In effect, the DJ had brought the success fee in to line with the previous costs regime for RTA claims which settled before trial of 12.5%, increasing it slightly to 15% to reflect the fact that the solicitors funded disbursements.

This was not interfered with by either the High Court or Court of Appeal.

The judgment also dealt with treatment of the ATE Premium, in respect of which the appeal was successful.

In short, this had been treated by DJ Bellamy and Soole J as a solicitor’s disbursement as opposed to merely an entry in the client account.

This meant that it should have been included in the bill, but wasn’t, and was therefore lost.

The Court of Appeal overturned this decision on the basis that:

“An ATE insurance premium is not a payment which a solicitor is obliged, as such, to make irrespective of whether or not put in funds by the client, comparable to court fees and counsel’s fees. It is not, technically speaking, a litigation expense at all”

HERBERT v H H LAW LTD [2019] EWCA CIV 527