District judges must toe the line and allow success fees in infant claims.
For personal injury lawyers who act for children, a rather ugly problem has been raising its head in courtrooms, relating to costs.
It is a slightly unpalatable topic, because it is about lawyers being allowed to take a cut from an injured child’s damages.
As we all know, the Jackson reforms saw responsibility for paying success fees move from the losing defendant to the winning claimant. The potentially harsh effect was softened by the Simons v Castle ruling, which commanded that general damages across the board be boosted by 10%.
All this applies to infant claims just as much as it does to cases involving adult claimants. But where the claimant is a minor, the success fee payment is made as part of the order approving and investing the damages award.
This gives judges an opportunity to refuse to allow the lawyer to take their success fee – which they are doing on a regular basis.
It is easy to see what is going on in the judges’ minds. Their number one focus is on ensuring that the injured child has the full extent of the funds they need to meet their medical and other requirements. They do not want to see a child missing out because part of their compensation was diverted to the lawyers.
The judge will have to decide whether the success fee being sought (which is capped at 25% of general damages) was reasonable, weighed against the risk of the lawyers losing the case and getting nothing. That assessment will inevitably be fairly subjective, and will always be made with hindsight, after the case has been won.
It is not really surprising that judges are preferring to keep the infant’s compensation intact, and considering that the success fee demanded is not justified – the case was obviously a banker.
The danger in this only becomes apparent when you take a few steps back, and take a look at the wider picture.
Claimant lawyers never wanted to take part of their fees from their injured client’s compensation. But that is the model the government has now introduced, through the Jackson reforms. It is parliament’s intention.
PI law firms are already being squeezed financially, and they need to charge success fees in infant claims in the same way that they do for other claims where they are taking on risk. These fees need to be justified, and must accurately reflect the chance of the claim failing. But the success fees do need to be charged.
If judges are consistently refusing to allow success fees in infant settlements, they are not following the will of parliament.
And while they may be being generous towards the child claimant in front of them, they could actually be making it harder for future child claimants to achieve fair compensation – because, if this practice persists in the courts, it will start getting more and more difficult for child claimants to find a lawyer willing to act for them. Many solicitors are already beginning to question whether they can afford to act for children.
Let’s hope that an appellate authority will deal with this issue soon, and set district judges on the right track.
Until it does – as solicitor-advocate Martin McGann reports in the June edition of Litigation Funding – these infant claims are standing on thin ice.
Rachel Rothwell is editor of Litigation Funding magazine