Kerry Underwood

DOES A CLIENT WITH A PRE-JACKSON CONDITIONAL FEE AGREEMENT WITH A NIL SUCCESS FEE GET THE 10% UPLIFT

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In the initial decision in the case of Simmons v Castle [2012] EWCA Civ 1039

the court held that with effect from 1 April 2013, general damages in tort cases would be increased by 10% from current levels as stated in paragraph 20 of that judgment:-

and this was clarified in the judgment in

Simmons v Castle & Ors [2012] EWCA Civ 1288:-

“Accordingly, we take this opportunity to declare that, with effect from 1 April 2013, the proper level of general damages in all civil claims for (i) pain and suffering, (ii) loss of amenity, (iii) physical inconvenience and discomfort, (iv) social discredit, or (v) mental distress, will be 10% higher than previously, unless the claimant falls within section 44(6) of LASPO. It therefore follows that, if the action now under appeal had been the subject of a judgment after 1 April 2013, then (unless the claimant had entered into a CFA before that date) the proper award of general damages would be 10% higher than that agreed in this case, namely £22,000 rather than £20,000”

The judgment goes on to state that:-

“27.        In our view, it is clear from these observations that both Sir Rupert and the MoJ envisaged and intended the primary purpose of the 10% increase in damages would be to compensate successful claimants, as a class, for being deprived of the right which they had enjoyed since 2000 to recover success fees from defendants, in cases where a claimant was funding the legal costs of pursuing his or her claim by a CFA. The reason, or at least the principal reason, Sir Rupert made the point that the level of general damages was generally on the low side was to meet the argument that the 10% increase in damages could be said to represent something of a windfall for successful conventional claimants. Similarly, it appears clear that the MoJ regarded the proposed 10% increase in damages as being a quid pro quo for depriving successful CFA claimants of the ability to recover success fees from the defendant.”

and

“40.        … Rather than excluding from the 10% increase those claimants who enter into CFAs before 1 April 2013, we would prefer to exclude those claimants who fall within the ambit of section 44(6) of LASPO. First, this would mean that there will be a guaranteed identity between those successful claimants who are statutorily entitled to recover their success fees from defendants and those successful claimants who are disentitled from enjoying the 10% increase in general damages. Secondly, in so far as there is any risk of satellite litigation, as Mr Aldous suggests, it will be limited to one formulation, namely that set out in section 44(6).

  1. … In principle, as reflected in our earlier judgment, general damages should be increased by 10% in all cases where judgment is given after 1 April 2013, subject to the exception, explained above, where the claimant entered into a CFA before 1 April 2013. That exception is based on the fact that CFA claimants are better off under such a CFA than they will be under a CFA (or a damages based agreement) entered into after that date.”

The judgment does not deal with the different types of Conditional Fee Agreements and does not deal with those Conditional Fee Agreements with a nil success fee.

Section 44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 sates:-

“(6) The amendment made by subsection (4) does not prevent a costs order including provision in relation to a success fee payable by a person (“P”) under a conditional fee agreement entered into before the day on which that subsection comes into force (“the commencement day”) if—

  • the agreement was entered into specifically for the purposes of the provision to P of advocacy or litigation services in connection with the matter that is the subject of the proceedings in which the costs order is made, or
  • advocacy or litigation services were provided to P under the agreement in connection with that matter before the commencement day.”

Thus in simple terms those Agreements that fall within the ambit of section 44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 are pre-1 April 2013 Conditional Fee Agreements for the provision of advocacy or litigation services where there is a success fee payable.

As I have set out previously a Conditional Fee Agreement with a nil success fee does indeed have a success fee, albeit that that success fee is nil and no success fee payable, because it is nil.

The Oxford English Dictionary defines “payable” as:-

  1. that is to be paid; due, owing; falling due 
  2. that can be paid; capable of being paid

Pay is defined as:-

“The action of paying, as a verb it is defined as:-

  1. to give
  2. (personal) what is due in discharge of a debt, or as a return for services done, or goods received, or in compensation for injury done; to remunerate, recompense.
  3. to give a recompense for, to recompense, reward, requite (a service, work, or action of any kind)
  4. to give, deliver, or hand over (money, or some other thing) in return for goods or services, or in discharge of an obligation; to render (a sum or amount owed).
  5. to give or hand over the amount of, give money in discharge of (a debt, dues, tribute, tithes, ransom, fees, hire, wages, etc.)
  6. to give money or other equivalent in return for something or in discharge for an obligation;”

In my view there cannot be payment of zero and therefore there can be nothing payable and therefore a nil success fee cannot be “payable” and those Agreements with a nil success fee would therefore not fall within the meaning of section 44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

On balance, it is my view that a pre-1 April 2013 Conditional Fee Agreement with a nil success fee cannot be included within the ambit of section 44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and thus will attract the 10% uplift stated in Simmons v Castle & Ors [2012] EWCA Civ 1288.

In Summers v Bundy [2016] EWCA Civ 126

the Court of Appeal held that the 10% uplift applies to all claimants except those covered by Section 44 (6).

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Written by kerryunderwood

March 11, 2016 at 2:43 pm

Posted in Uncategorized

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