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Ellerton v Harris, Court of Appeal, 16 December 2004

22 December 2004
The issues

“Road Traffic” – Costs- Success fee – CFA

The facts

The Claimant was walking in Tesco’s car park in Whitchurch on 19th June 2000 when the Defendant reversed his car out of a parking space and knocked her over.

Letter of Claim was sent on 28th September 2000, 6 days after the CFA was signed. On 30th January 2001 the Defendant accepted liability. On 16th May 2003 proceedings were issued. On 29th October 2003 the Defence was served admitting liability. Negotiations continued. On 3rd December 2003 the claim was settled for £15,378.79 with costs on a standard basis.

The matter went to Detailed Assessment. The success fee set out in the CFA was 60%. The Claimant’s solicitors claimed 40% but limited their claim to 30% at the Hearing. The Defendant contended that a reasonable success fee would have been 12.5%.

The District Judge allowed 30%.

The Defendant appealed.

The decision

The Claimant’s solicitor argued that the District Judge had to consider the situation as when the Claimant’s solicitor was instructed. The Claimant’s solicitor had calculated that the chance of success at 65% hence the success fee of 60%. The Defendant had argued that this was a straightforward road traffic accident with a 90% prospect of success. The only issue was whether the Claimant’s solicitors would be able to trace the driver who did not stop after the accident. However they could always have had recourse to the MIB it had been argued. The Defendant’s argued that the prospects of success were far better than 75%.

The guidance given by the Court in Callary v Gray could be applied by analogy to this case even though this case had been allocated to the Multi Track and settled for a sum exceeding £15,000.00. There were no factors which could legitimately have taken the success fee over 20%. The uncertainty about the identity of the driver could have been resolved by a single telephone call to the police which could have been made before entering into the CFA. The only significant risk related to the possibility of the Claimant accepting her solicitor’s advice and then not beating a Payment in. This was one of the rare risks which justified a success fee set as high as 20% in the simplest of claims.

Appeal allowed.

Comments

The Court of Appeal conscious of “some lingering uncertainty” about the combined affects of Callary v Grey and Halloran v Delaney restated the position for “the benefit of District Judges and Costs Judges”. In respect of the old regime prior to the introduction of fixed success fees in road traffic claims.

The reasonableness of the success fee had to be assessed at the time the CFA was agreed. It was permissible for any CFA to include a two stage success fee and this was to be encouraged. Statistical evidence was now available (Fenn v Rickman, calculating reasonable success fees for rta claims, October 2003 published on civil justice counsel’s internet website – www.civiljusticecounsel.gov.uk) to which it was permissible to refer. Whether it was permissible on the assessment of costs for a Judge to have recourse to paragraph 11.8 (2) of practice direction, namely the power when considering whether a percentage increase was reasonable to allow different percentages for different items of costs for different periods was an issue that would be determined by this Court in an Appeal that was to be heard in the New Year.

It was not permissible simply to adopt the new CPR fixed rates for success fees when assessing the reasonableness of a success fee in a rta case where the assessment of the CFA were not governed by the new rules.

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