Claimant can recover success fee after litigation friend swap

A claimant whose mother was replaced as his litigation friend by the Official Solicitor during the course of his case is able to recover a success fee for the whole length of the litigation, a costs judge has ruled.

In Mole and Anor v Parkdean Holiday Parks Ltd and Anor [2017] EWHC B10 (Costs), the claimant, who was seven at the time, suffered brain damage in an accident in the swimming pool of a holiday park in south Wales. A decade later, in 2015, HH Judge Court QC approved an order for lump sum damages of just over £1.35m and periodical payments starting at £171,000 per annum. The order provided for the payment of the claimant’s reasonable costs by the defendants.

The claim was originally pursued on instruction from the claimant’s mother as litigation friend under a conditional fee agreement (CFA) with Irwin Mitchell in 2006. The success fee was set at 100%.

Concerns arose as to the mother’s ability to cope with the effects of the claimant’s injuries and, in 2013, HH Judge McKenna ordered her removal as litigation friend and replacement with the Official Solicitor. The Official Solicitor signed a document headed ‘Deed of ratification and affirmation’, with the purpose of continuing Irwin Mitchell’s conduct of the claim under the CFA.

There were default provisions such that, if there had been no effective ratification or affirmation, there was deemed to be a new contract with the solicitors and the success fee was limited to a maximum of 25% of the damages awarded to her, in accordance with the Conditional Fee Agreements Order 2013.

The defendants argued that it was not possible in fact or law for the Official Solicitor to ratify or affirm the CFA entered by the claimant’s mother, and that the effect of the deed was that the Official Solicitor entered a new CFA.

The claimant submitted that the claim for costs was and remained that of the claimant himself and that the retainer was properly to be regarded as one between the claimant and the solicitors from the outset, relying on the Court of Appeal’s 2015 ruling in Blankley. In that case, the court upheld a High Court decision that a client’s loss of mental capacity in the course of proceedings did not automatically terminate their solicitor’s retainer.

Master Brown ruled that the analysis in Blankley was clear. “It leads to the conclusion that the retainer that was first entered into 2006 has remained effective during the course of the claim unaffected by the substitution of a new litigation friend.

“Accordingly, the claim for costs in the period after the appointment of the Official Solicitor is not dependent upon the Official Solicitor having entered into a new agreement on 1 April 2013 or indeed founded upon any such agreement. There was already in existence an agreement which was sufficient to ground the liability of the claimant to pay the success fee under the original CFA for the period after the appointment of the Official Solicitor.”

Master Brown also observed that, if the defendants were correct, the Official Solicitor would be liable for the success fees and would be required, potentially, to pass this liability on to the claimant. This would be “a matter of potentially very significant and serious prejudice”. By contrast, the outcome of his ruling “avoids what seems to be in the nature of a windfall”.


This post was posted in ACL e-Bulletin

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Post type
Costs News
Published date
06 Apr 2017

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