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Mohammed Butt v Christi Nizami- High Court on appeal from Master O'Har

23 February 2006
The issues

Costs – CFA – Conditional Fee Agreement – Fixed Costs – Whether fixed costs and success fee were recoverable if conditional fee agreement invalid – Whether indemnity principle applied to fixed recoverable costs provisions of Part 45.

The facts

The claim arose out of a road traffic accident on the 30th December 2003. Mr Butt hit a car driven by Mr Kamuluden in which Mr Nazami was a passenger. Both claimants suffered whiplash injuries. They instructed a firm to pursue claims on their behalf and entered into CFAs. Each claim was settled before proceedings began. Mr Nazami’s claim was settled in January 2005 for £1,675.05 plus costs. Mr Kamuluden’s claim was settled on 23rd February 2005 for £2,430.31 plus costs. Costs could not be agreed and Part 8 proceedings were issued in April 2005. The defendant/main party disputed the compliance of the CFA with the conditional fee agreement regulations 2000. In particular asked for conformation that the fee earner with the conduct for the matter had personally seen and checked the motor policy document of the car in which the Claimant was travelling for legal expense insurance and whether the fee earner had checked the household policy documents for legal expenses insurance.

In their Part 8 claim forms the claimants claimed fixed recoverable costs under CPR45.9 together with disbursements under CPR45.10 and a success fee under CPR45.11. The total of costs claimed in the case of Mr Kamuluden £2,168.91 and in Mr Nazami’s case £1,962.32.

It came before Master O’Hare who took the view that entitlement to fixed recoverable costs and a success fee did not depend on the existence of a valid and enforceable CFA. He held that though disbursements were subject to assessment, fixed recoverable costs and success fees should be recoverable without any intervention by the Court. The defendant appealed.

The decision

The intention underlying the fixed cost regime was to provide an agreed scheme of recovery which was certain an easily calculated. This provided fixed levels of remuneration which might over reward in some cases and under award in others but which were regarded as fair when taken as a whole. Underneath it was clear that in making this change that the draftsman of the rules intended the indemnity principle should not apply to the figures that were recoverable. If that were so then there was little reason why it should be assumed that the indemnity principle would have any application to the fixed cost regime and good reason why it should not, namely:-

I. The overriding objective of the CPR in saving expense and dealing with cases in a proportionate way.

II. The range of fixed costs varied between £800 and £2,550. On this basis the range of success fee is ranged from £100 to £318.75. It was not consistent with the overriding objective that sums of this sort should be subject to the sort of scrutiny that would be a matter of course if the defendants were right.

III. The whole idea underneath the regime was that it should be possible to ascertain the appropriate costs without the need for going to court.

Appeal dismissed.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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