ADVOCACY FEES IN FIXED COSTS CASES
This blog has been updated to 21 June 2016.
the Queen’s Bench Division of the High Court held that the advocacy/brief fee in the Road Traffic Accident Fixed Costs Scheme is recoverable if the matter settles on the day of trial, and that “there are sound policy reasons for concluding that the interests of justice would be better served if the advocate was not penalized financially for negotiating a settlement at the door of the court.”
Here the parties attended at court for a fast track trial under the Road Traffic Accident Fixed Costs Scheme which provides for a fixed advocacy fee depending upon the amount awarded by the court.
On the morning of the trial the parties asked the judge for more time and settled the matter on the basis of £20,000.00 plus costs.
The judge assessed costs but refused to award the fixed advocacy fee as the case had been settled before the “final contested hearing” had started.
Under CPR 45.29(C) Table B a reference to “trial” is a reference to the final contested hearing.
The claimant appealed to the High Court.
The single issue was whether a trial advocacy fee is recoverable under the fixed costs scheme if a case settles on the day of trial but before the trial actually commences.
The High Court held that it was. Table B applies if a fixed costs matter is settled “on or after the date of listing but prior [to] the date of trial.”
A matter that settles on the date of trial obviously does not settle “prior” to the date of trial and thus is not covered by Table B.
Thus either the situation fell in Table C or was not covered at all. Table C refers to a “trial advocacy fee”.
The court held that the Civil Procedure Rules in relation to fixed costs “were intended to be a comprehensive guide to what was recoverable and when.”
The court cited with approval the decision of the High Court in
Nizami v Butt  1 WLR 3307 that the intention of a fixed recoverable costs regime:-
“…was to provide an agreed scheme of recovery which was certain and easily calculated. This was done by providing fixed levels of remuneration which might over-reward in some cases and under-reward in others, but which were regarded as fair when taken as a whole.”
If necessary, although the court doubted that it was, a purposive construction would be given to achieve that result.
The court also noted the difference in wording as compared with that relating to success fees which uses the term “concludes at trial”, the point being that the recoverable success fee jumps to 100% in those circumstances.
In three cases the courts had held that a trial had not started if settlement is reached beforehand, however close to the trial. Those cases are:-
Sitapuria v Moorzadi Khan (Unreported), 10 December 2007, Liverpool County Court; and
Those cases were on a different wording and reinforced the view of the High Court here, that is that a different conclusion on the different wording is not only possible but essential.
A correct and sensible decision. It should be noted that it is confined to settlements on the day of trial, as anything settled before will come within Table B as settled “prior to the date of trial”.
How many advocacy fees?
The Civil Procedure Rules in relation to the calculation of the fixed advocacy fee where the advocate is representing more than one claimant are silent in relation to the fixed costs scheme which follows on from the Road Traffic Accident Portal and the Employers’ Liability and Public Liability Portal.
There are, and have been for some time, fixed advocacy costs in all fast-track matters, although this is not widely known.
In relation to all fast-track trials except those flowing on from the portals the relevant rule is CPR 45.40 which provides:-
“(1) Where the same advocate is acting for more than one party –
- the court may make only one award in respect of fast track trial costs payable to that advocate; and
- the parties for whom the advocate is acting are jointly entitled to any fast track trial costs awarded by the court.
(2) Where –
- the same advocate is acting for more than one claimant; and
- each claimant has a separate claim against the defendant,
the value of the claim, for the purpose of quantifying the award in respect of fast track trial costs is to be ascertained in accordance with paragraph (3).
(3) The value of the claim in the circumstances mentioned in paragraph (2) or (5) is –
- where the only claim of each claimant is for the payment of money –
- if the award of fast track trial costs is in favour of the claimants, the total amount of the judgment made in favour of all the claimants jointly represented; or
- if the award is in favour of the defendant, the total amount claimed by the claimants,
and in either case, quantified in accordance with rule 45.38(3);”
Although the rule does not specifically say so it is clear that where there is more than one advocate each advocate gets the separate fixed advocacy fee.
Thus it will be seen that under that scheme one adds up the total of the awards and that gives the figure upon which the advocacy fee is based.
Thus suppose that an advocate appears for four clients, each of whom recovers £4,000.00. That gives a total of £16,000.00 which is within the upper band and thus attracts an advocacy fee in ex-portal cases of £1,705.00.
If one of those claimants is a London claimant attracting a 12.5% uplift, is that applied to the whole sum or is only a quarter, that is 3.125%, applied to reflect the fact that only a quarter of the claimants is London based?
It becomes more complicated if the claimants recover different sums. Suppose the total awarded is £20,000.00, of which the London claimant gets £8,000.00 and the other three get £4,000.00 each. That total attracts an advocacy fee of £1,705.00.
Given that the London claimant has received 40% of the total damages is the enhancement then 5% of the total to reflect the fact that 5% is 40% of the enhancement of 12.5%?
At present this involves relatively small sums. That will change as Fixed Recoverable Costs spread to all areas of work and to all claims up to £250,000.00.
One would have thought that the courts would apply CPR 45.40 to ex-portal fixed costs cases where CPR 45.29(C) is silent.
a Circuit Judge allowed two sets of advocacy fees where one advocate was representing the two claimants.
There the judge also considered the issue of whether the solicitors got one or two sets of fees for all the work prior to advocacy and concluded that they got a set for each claimant.
That has generally been regarded as the rule and thus the real issue was whether there was one or two advocacy fees.
The judge had this to say:-
“2. There is no dispute that the Claimants are entitled to their costs pursuant to the regime for fixed costs set out in section IIIA of CPR Part 45. These were claims started under the Pre-action Protocol for Low Value Personal Claims in Road Traffic Accidents, but which came out of the protocol, with Part 7 proceedings leading to the case being disposed of at trial. Accordingly, pursuant to CPR 45.29B, the Claimants are entitled to the fixed costs set out under paragraph C in Table 6B to CPR 45.29B (that is to say the total of £2,655 and 20% of the damages awarded and the relevant trial advocacy fee) and disbursements in accordance with CPR 45.291.
- The main issue that arises is whether, on account of their [sic] being two Claimants, each Claimant is entitled to recover the fees set out in Table 6B to CPR 45.29B (as the Claimants contend) or whether the claim is to be taken as a whole, allowing only the global award of costs (as the Defendant contends). The difference that this makes to the amount of costs is that, if the Claimants’ argument is correct, they are entitled to the fixed sum of £2,655 and the trial advocacy fee twice over, whereas if the Defendant is correct, they are entitled to the fixed sum and the advocacy fee only once jointly. The 20% uplift and the disbursements would amount to the same figure on either analysis, since the 20% would apply either to each individual award of damages or to the total award of damages; and the disbursements are in any event apportioned to each case.
- There is nothing in Part 45 which definitively guides the Court as to which of these two interpretations is right. The term “claim” is used interchangeably in the CPR to mean an individual cause of action (see for example CPR 7.3) or a case which may comprise one or more individual causes of action (see for example CPR 19.1), so in principle either interpretation could be said to be consistent with the rules.
- Both parties submitted before me that the other gained something of a windfall if their interpretation was correct. Unfortunately this is the nature of fixed costs regime – the amount of costs is inevitably a broad estimate of what is reasonable rather than a reflection of the actual time involved in preparing or presenting a case.
- It is not self-evident to me that the potential windfall to the Claimants’ lawyers through recovering the fixed fee and the advocacy fee twice over is any less than the windfall to the Defendant from only paying the fees once. The work involved in representing two Claimants will almost certainly be more than that involved in representing one. It is likely the additional work involved would be more than would be compensated by the recovery of 20% of the damages on two Claimants rather than one (especially as that fee is not intended to cover advocacy), but it is unlikely that the additional work, whether by way of preparation or advocacy, would be twice as burdensome as the work for one client alone. Hence either interpretation of the rules presents a potential windfall to one party.
- In my judgement, the correct answer to this issue can be discerned from the wording of Table 6B to CPR 45.29C. It states that it deals with the fixed costs that are recoverable “where a claim no longer continues under the RTA protocol.” Under the protocol there is no possibility of including the claim of more than one injured person in on claim. The protocol provides for a claim notification form which can only relate to a single person, and throughout the protocol the assumption is that only a single Claimant is involved. Table 6B cannot in my judgement properly be interpreted to mean the costs of the claim in any more broad sense than that contemplated by the protocol, that is to say the cause of action of an individual.
- Accordingly in my judgement, the Claimants are each entitled to recover the fixed fee and the advocacy fee.”
However it does appear that CPR 45.40 was not spotted by either advocate, and nor by the judge, and therefore this cannot be regarded as a definitive ruling.
However Cardiff County Court has adopted the same view as Chester County Court and I am grateful to Robert Vernon of 9 Park Place Chambers in Cardiff for drawing my attention to that.
Sunderland County Court has also adopted this line.
Newport County Court have also accepted the correctness of this approach.
The case in Newport County Court had an interesting twist in the tale in that the judge accepted that in principle both claimants were entitled to the full fixed costs, and also the full separate advocacy fee but was clearly unhappy about awarding that level of fixed costs – in excess of £3,000.00 – to a claimant who had recovered £200.00.
Consequently what the judge did was to reallocate the case to the small claims track after giving judgment and award fixed costs of £80.00!
Of course there is an argument that as the Civil Procedure Rules specifically have that rule in relation to non-ex-portal matters then the very fact that there is no such rule in relation to ex-portal matters allows the court to reach a conclusion on the basis that had the Civil Procedure Rules intended the advocate to be restricted to one advocacy fee in an ex-portal case then it would have been very simple to apply the existing CPR 45.40, but they had not done so.
However I suspect that that is due to the well-known incompetence of the Rules Committee rather than any deliberate policy decision.
CPR 45.40 itself, specifically dealing with advocacy fees, reinforces the point that the preparation fee is definitely per claimant.
It could hardly be otherwise – claims settle at different stages and thus one may be resolved pre-issue, another post-issue and pre-allocation etc.
Clarification by a court which has considered CPR 45.40 in detail would be welcome.
Please also see my other blogs:- Fixed Costs where Listed for Trial at Allocation, Disposal Hearings: Which Fixed Costs are Payable?, Advocacy Fees in Fixed Costs Cases & Fixed Costs, All the Portals and Fixed Recoverable Costs.