15 JUL 2014
Carol Bright v Motor Insurers' Bureau  EWHC 1557 (QB) – Funding – Costs – Recoverability of Success Fee
The Claimant appealed that theMaster had been wrong to reduce the success fee claimed from 75% down to 30%.The Master had not erred in hisapproach to assessing a reasonable success fee and neither was the conclusion of 30% outside the parameters of a decision of a Master properly directing himself on the relevant circumstances.
High Court, Queen’s Bench Division
Mrs Justice Slade DBE
15 May 2014
The claimant suffered seriousinjury when on 26 September 2010, the first defendant, Mr Abimbola reversed at speed into her. As a result she suffered a severed spinal cord at C3/4 leaving her tetraplegic. Mr Abimbola’s insurance company avoided its obligations underthe policy and the claimant claimed against the second defendant, the Motor Insurers’ Bureau (“MIB”).
The claimant signed a CFA with Irwin Mitchell LLP on 11 October 2010 which provided for a two stage success fee. A 50% success fee was payable if the case settled before three months of a trial date or the opening of a trial window and 100% if settled thereafter. Proceedings were issued on 28 March 2011 and on 27 May 2011, the MIB filed a defence denying liability and asserting contributory negligence. A preliminary trial on liability was listed for 1 May 2012. On 26 April 2012, during a second joint settlement meeting, the claim settled for a lump sum payment of £1.6 million with periodic payments of £230,000 per annum. The claimant served a bill of costs which included a success fee of 75% on the solicitors’ charges.The MIBchallenged the claim and offered 30%. The Costs Master considered that therisks to be considered by the claimant’s solicitors revolved entirely around the risk of a Part 36 offer and the complications that might ensue from any finding of contributory negligence. The Master concluded that it would be reasonable to allow 30%.
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The claimant appealed stating that the Master failed to take into account three factors including the material circumstances that the claim may not be won, secondly in cases with a “CFA Lite” the costs payable to the claimant’s solicitor will be restricted to those she recovers from the defendant and thirdly, if the claimant fails to beat apart 36 offer rejected on the advice of her solicitors, they have no entitlement to charge their basic or success fees.
It was held that the reasonableness of the success fee is to be determined by reference to the facts and circumstances as they reasonably appeared to the solicitor at the time whenthe CFA was entered into. The Master gave detailed consideration of the claimant’s solicitors’ assessment of risks of the litigation which formed the basis of the 50% first stage success fee. The conclusion of the Master that the prospect of a win but no recovery of costs was negligible cannot be said to be impermissible.The Master had not erred in his approach to assessing a reasonable success fee. Consequently the appeal was dismissed.
Given that success fees in RTAcases worth up to £500,000 were fixed at 12.5% for cases that settled beforetrial pre Jackson, it is not surprising that the success fee in this case was reduced from 75% to 30%.