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Smiths Dock Limited v Edwards, High Court, 13 May 2004

27 May 2004
The issues

Costs – Conditional Fee Agreement – Success Fee – What Fee Appropriate in a Mesothelioma Case.

The facts

The action arose from the contracting of mesothelioma by Peter Edwards as a result of exposure to asbestos during his employment with Smiths Dock. He died on 25th May 2000. On 7th September 1999 he had instructed Irwin Mitchell to pursue a claim on his behalf. On 31st August 2000 a CFA was made between his widow and Irwin Mitchell and on 20th March 2001 proceedings were commenced.

On 22nd September 2002 shortly before Trial liability was admitted. On the first day of the Trial the Respondents were awarded by agreement £180,000.00 plus costs.

The CFA provided for a success fee of 87% if the Claimant should win. The matter came before Deputy Costs Judge on Detailed Assessment from whom the Defendant paying party appealed.

The decision

Four issues had arisen. The Defendant appealed from the decision to allow a 20% enhancement on the published rate for a Sheffield solicitor; the decision to allow care and conduct of 100%; the decision to allow a success fee of 87%; and the decision to allow a success fee on the preparation of the Bill of Costs.

The first issue had been settled between the parties and the Respondent had conceded the second and fourth issue leaving the only live issue as the success fee of 87%. This case was very different from the cases considered in Callery v Gray. It was important to note that at the time the CFA had been signed, Fairchild v Glenhaven Funeral Services had not been decided at first instance. From the ready reckoner set out in “Cook on Costs” the success fee of 87% had been arrived at. There were at the time of the CFA several issues still alive – contributory negligence – prior health problems – issues relating to a low fibre count – and the issue of non-guilty exposure. The Defendant had argued the risks of recovering nothing were very slight and that in reality the live issues related to quantum and that quantum issues should not give rise to a high risk as reflected in a success fee.

Certainly at the date of the CFA it was possible to be very optimistic that some liability would be established but it was not certain and the risk was not negligible. In addition there were the quantum issues. Advising on quantum issues was not straightforward in such cases and whilst liability issues and quantum issues could usefully be considered separately in a case such as this, ultimately a single success fee had to be arrived at on an assessment of the prospect of “winning”. The decision of the Costs Judge in allowing the success fee of 87% could not be interfered with.

Appeal dismissed.

focus on...

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