Kerry Underwood

SUCCESS FEE AND INSURANCE PREMIUM RECOVERABLE ON SWITCH FROM LEGAL AID TO CONDITIONAL FEE AGREEMENT

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

AB v Mid Cheshire Hospitals NHS Foundation Trust [2019] EWHC 1889 (QB) (16 July 2019)

the High Court dismissed an appeal against a Regional Costs Judge’s order that additional liabilities of a success fee and an ATE insurance premium were recoverable by the claimant, a protected party acting by his mother and litigation friend, from the defendant.

The claimant claimed damages for medical negligence relating to catastrophic brain injuries and the litigation friend instructed solicitors in 2010 and legal aid was granted but the litigation friend discharged the legal aid certificate and entered into a Conditional Fee Agreement in February 2013.

The claim was settled for a £3.8 million lump sum and annual periodic payments, by which time, the claimant had instructed 12 experts in various fields.

The litigation friend’s bill of costs amounted to just over £1 million, including a success fee of £388,173.40 and an ATE insurance premium of £29,256.

The court held that the Regional Costs Judge had been entitled to find that the additional liabilities were reasonably incurred.

The litigation friend’s decision to change to Conditional Fee Agreement funding was reasonable because a serious dispute had arisen between three experts about causation, which was critical to the claim’s success.

Experts had already been instructed and hourly rates had already been an issue for one of them although he had reduced his rate.

The Legal Services Commission’s approach to hourly rates also caused problems with other experts.

The Regional Costs Judge had been entitled to find that the failure of the litigation friend’s solicitors to provide Simmons v Castle advice that the claimant would lose the 10% uplift on damages did not make the decision to change funding unreasonable because advice on that point would not have affected her decision.

The court held that failure to advise on the potential liabilities for a higher hourly rate and success fee did not undermine the reasonableness of the change.

There was a very real risk of no recovery because of the causation issue, meaning that the requirement to have the freedom of a Conditional Fee Agreement to attempt to secure some recovery became the decisive feature.

 

Please see –

COSTS ROUND-UP

LEGAL OMBUDSMAN: AN OMBUDSMAN’S VIEW OF GOOD COSTS SERVICE SECOND EDITION

COURTS MUST NOT CONSIDER JACKSON REFORMS ETC. SAYS COURT OF APPEAL

Written by kerryunderwood

August 9, 2019 at 8:00 am

Posted in Uncategorized

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