Callery v Gray & Russell v Pal Pack Corrugated Limited

Costs – Insurance Premiums – Uplift Appropriate in respect of the CFA

These two appeals both concerned claim for personal injuries suffered in road traffic accidents. Both were settled quickly without any need to bring Court proceedings. In Callery the Circuit Judge upheld the District Judge’s decision allowing a success fee of 40%. In the other, a Circuit Judge reduced the claim success fee from 30% to 20%.

1. ATE premiums are in principal recoverable as part of the Claimant’s costs even if the claim is resolved without the need for proceedings. In principal a Claimant does nothing wrong if he enters into a CFA with a success fee and takes ATE insurance when he first consults his solicitor and before the letter of claim and therefore the Defendant’s response.

2. The Court gave some general guidance in respect of modest straightforward claims for compensation. In such cases where a CFA is agreed at the very beginning, 20% should be the maximum uplift that could reasonably be agreed.

3. It might be appropriate for solicitor and client to agree a two stage success fee. It gave as an example a situation where an uplift might be agreed at 100% subject to a maximum of 5% if the claim settles before the pre action protocol period. The 20% figure was a figure put forward tentatively on the basis of very limited data and the Court indicated that it might be appropriate to review that figure once better data was available.

4. A Costs Judge was directed to enquire as to the reasonableness of premiums and would deliver a separate judgment.

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