High Court upholds assessment of success fee in high-value clinical negligence case

The High Court has upheld a decision from the Senior Courts Costs Office to assess a claimant’s solicitor’s success fee at 50%, even though the conditional fee agreement (CFA) provided that it rose to 80% on the service of proceedings in what was a high-value clinical negligence case.

Ruling in Chocken v Oxford University Hospitals NHS Foundation Trust [2020] EWHC 3269 (QB), Mr Justice Stewart found that Master James had been entitled to express concern that it was a case where, at the point proceedings were served, the claimant had already known for well over a year that liability was not contested.

The CFA provided for a success fee of 50% up to service, rising to 80% if the claim concluded not less than 45 days before trial, and 100% thereafter. The claim settled 70 days before the 12-day High Court trial was listed to commence for £2.85m plus periodical payments rising to £85,000 a year.

The claimant served a bill of costs for a little under £1.1m, which Master James assessed at £728,000, while assessing the staged success fee at 50%. It was an unusual case in that causation was not at issue.

Master James said that, as the claimant in effect already knew that liability was not going to be vigorously defended, the “battle royal” was going to be about quantum. She accepted the defendant’s submissions that, in a battle about the money, “the win is already in the bag unless the claimant takes it all the way and fails to beat a part 36. The settled law on that tends to suggest that the risk adherent to that is relatively low and also tends to suggest that adding the 50% to, say, 20% for the part 36 risk would probably still be too much”.

She ruled that serving proceedings did not increase the risk. “Based on the fact that the success fee is meant to reflect the risk of a win or not winning and not getting your costs, in my view 50% is where this one belongs throughout. I am not saying that 100% would have been unreasonable had it got to trial or even within 45 days of trial, but it did not…

“The main point is this: for a case of this severity and of this value, even with the admission of liability, you were always likely to have to issue proceedings. It may perhaps have been more reasonable to set a trigger at the point at which proceedings become contested, perhaps by imposing a trigger of X-amount of weeks after issue or X-amount of weeks after service, or indeed upon receipt of a fully pleaded defence.

“In my view, the defendant’s submission that you were in effect setting a trigger that was more or less guaranteed to take effect, is one that I think has hit home.”

The claimant appealed the success fee decision but Stewart J – sitting with Master Whalan as assessor – rejected the argument that the master had used hindsight to take into account the fact that the defendant subsequently admitted breach of duty.

After analysing her ruling, he said it was “inconceivable that she made an error of principle such as is alleged by the claimant”.

Stewart J went on to reject that it was an error to decide that the service of proceedings did not on the facts of the case increase the risk of losing.

He said: “It is up to the solicitor to choose how and when (if at all) to stage a success fee. However, the level of the success fee and any staging must be justified. The master accepted a 50% success fee as reasonable from the outset, given all the risks (liability, part 36 and risk of deportation in 2015), but did not accept in the circumstances of the case and the initial level of success fee that any increase was justified at the point chosen for stage 2.

“She considered that 50% was reasonable up to a point close to trial. This was a decision she was entitled to make. In addition, she was concerned that in this case from the outset proceedings were likely, even if liability was conceded, such that the trigger could not be justified as reasonable.

“The central, though not only, risk of a CFA is total failure of the claim such that no costs will be recoverable…

“The master did not fail to take into account factors which she ought to have taken into account: nor did she give inadequate weight to any factors.”

Kevin Latham (instructed by Shoosmiths) for the claimant. Roger Mallalieu QC (instructed by Acumension) for the defendant.

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Costs News
Published date
10 Dec 2020

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