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Burton v Kingsley, High Court, 25 May 2005

8 June 2005
The issues

Costs – Conditional Fee Agreement – Success Fee – What Appropriate Level Of Percentage Uplift Under A Conditional Fee Agreement Was In The Case Of A Significant Road Traffic Accident Occurring After 5th October 2003

The facts

On 15th August 2001 the Claimants were passengers in a car being driven by the First Defendant on the A27 near Portsmouth. The Second Defendant was driving a car in the same direction. The Second Defendant was driving a car in the same direction. The First Defendant’s car left the carriageway suddenly and plunged down an embankment and overturned. The First Claimant was rendered tetraplegic and the Second Claimant suffered spinal injuries.

The matter was settled on the first day of Trial (on liability only) with Judgment for the Claimants against the First Defendant and the claims against the Second Defendant being dismissed.

It was further ordered that the First Defendant pay the Claimant’s costs including the Claimant’s costs of pursuing the Second Defendant.

The Claimant’s solicitors entered into a CFA with each Claimant four weeks after the accident providing for a success fee of 100%. The First Defendant submitted that the figure was unreasonable and that it should be reduced to 10% or a maximum of 20%. The Claimant’s Counsel in his Skeleton for the liability hearing had noted that the Claimants were innocent passengers and that they were bound to succeed in full against one or other of the Defendants.

The decision

The reasonableness of the uplift had to be determined by reference to circumstances known or that should reasonably have been known at the date the CFA was entered into (See KU v Liverpool City Council).

A two stage success fee providing for a low uplift if the claim settled within a defined period but a higher uplift if it did not settle within that period was permissible and should be encouraged but was not mandatory. Where a single success fee was agreed it would not generally be possible to justify as high a percentage figure as the upper figure in a two stage success fee (KU v Liverpool City Council).

Where a single success fee was agreed the Court did not have power to direct that the fee was recoverable at different rates for different periods of the proceedings. (Also see KU v Liverpool City Council). The solicitor’s risk assessment concluded that this was a complicated matter with no clear picture of what had happened although the prospect of succeeding on primary liability was strong. It proposed a 100% success fee at the outset that could be reducible on review if facts came to light or an admission of liability was forthcoming at an early stage. There was a suggestion at an early stage that an untraced driver had been responsible for the accident but this suggestion was eventually dropped by the Defendants.

It was reasonable for the Claimant’s solicitors to enter into the CFA with their client when they did.

CFA risk assessment was a fair survey of the position at that time. The assessment that the Claimant’s case was strong was correct although it was reasonable to acknowledge the existence of uncertainties and difficulties creating a significant element of risk. The potential complexity and costs of the overall case was increased by the seriousness of the Claimant’s injuries. The suggestion that the risk assessment could be reviewed was a misunderstanding of the legal position by the solicitors. It would have been open for the solicitors to agree a two stage success fee but this was not considered. The case did not fall within the Callery v Gray category of a modest and straightforward claim for compensation for personal injuries resulting from traffic accidents. 20% was inappropriate. 100% was too high. The degree of risk was such that a reasonable figure would have been in the bracket of 33% to 50%. The Claimants would be allowed a figure at the top end of that bracket.

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