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Sarah Lapsley, Chestnutts Solicitors, Southport
The three cases listed below were all subject to success fee/ATE premium hearings before Costing Masters/Deputy Costing Master. Before passing comment upon the resulting decisions, it would be as well to provide a brief background to the point of the hearings.
The claimants involved in the above cases had switched from Legal Aid to CFAs shortly before 1st April 2013. April 2013 was the date set for, so far as these cases were concerned, changes in the payment of some costs to litigation.
Lord Justice Jackson had produced a detailed set of reforms prior to April 2013 regarding, amongst other proposals on funding of litigation, items that affected the recovery of success fees and ATE insurance premiums – both reforms which had an immediate effect upon the three above cases for both the claimants, and their respective legal representatives. In effect, both success fees and ATE premiums, after 1st April 2013, were no longer recoverable from the losing party, but were at the behest of the winning claimant. To this end, a 10% increase in general damages was to be made available as a “quid pro quo” as recompense.
This was cemented in Simmons v Castle  EWCA Civ 1039 and the subsequent amendments thereto in Simmons v Castle  EWCA Civ 1288 in the Appeal Court, which further ruled that the 10% additional damages would not apply in cases already subject to CFAs prior to 1st April 2013. The Lord Chief Justice’s comment was that a successful claimant would “have both the penny and the bun” should this additional 10% ruling extend to those already on CFAs.
These reforms were contained in the LASPO Act and the changes to Legal Aid delivery which came into force on 1st April 2013.
Thus arose a potential conflict of interest for legal practitioners. Would there be a rush to move cases on the files not already funded via CFAs onto such, prior to April 2013, but if they did, their client would be disbarred from the receipt of an extra 10% general damages. Bear in mind that the three cases mentioned above were all medical/clinical damages cases, in which even just the general damages were more than likely going to be very high, and therefore not insignificant amounts would be involved. The “rush to switch” in such circumstances is perfectly understandable – perhaps – because the legal representatives not only have to do their best for the client, but also for their practice – a dilemma.
As it happened, all three claims for success fees and/or ATE premiums recovery failed, for the same reason in each case – that the lack of full explanation and discussion between legal representative and client of the likely effect upon the financial implications that could arise as a result of the switch, meant that the client(s) were not in a position to make a reasoned and informed decision upon switching. In light of this, recovery was refused.
With regard to a client not being able to make a reasoned or informed decision concerning the above, it has to be put into context. There are many, many people, who when under the undoubted stress of cases like this - when faced by the professionals – be they medical, legal, technical or mechanical, going through complex details of appropriate application, would just say “Do the best you can” or “I will leave it in your capable hands”. The sin was one of omission, not commission.
The Jackson report and what has followed, must in part, or indeed whole, reflect upon the Governments concern over the escalating costs of Civil Litigation, particularly with regard to the burgeoning growth of No win-No fee litigation. The report does contain much focus upon proportionality and cost management of cases generally – but perhaps another time for that!
In the same vein, The Bar Council Review 2014 does indicate an increased interest in non-traditional funding arrangements, as well as an increased interest in CFAs and personal representation since the application of LASPO, and makes the same point that is contained in the Jackson Reform – lower value cases could prove difficult to place.