An ‘unsophisticated’ personal injury claimant had not given her informed consent to solicitors deducting more than £1,000 from her damages, the Court of Appeal has heard.
Lawyers for Nicky Herbert, a former client of Liverpool practice HH Law, said she had not understood the implications of the terms and conditions when she signed a retainer with the firm.
She successfully challenged the bill in the county court and had that decision upheld on appeal. Now the firm has gone to the Court of Appeal, warning that thousands of potential cases seeking refunds could be created if judges rule for the client.
Herbert, a baker, was a personal injury claimant whose £3,400 settlement was reduced by almost £1,200 after deductions for the solicitor’s success fee and after-the-event insurance premium.
For Herbert, PJ Kirby QC, instructed by Leeds costs recovery specialist JG Solicitors, told the court it was not clear to her what the deductions would be from the outset. ‘We are talking about an unsophisticated client,’ he said. ‘Is the client immediately supposed to understand the 25% [deduction from damages] is in addition to the ATE premium? That is not clear.
‘One of the requirements of a solicitor for the client to have informed approval is to make things clear to the client. It would require an explanation as to why the success fee was set at a particular level and should also require a list of what is included in the [25%] cap.’
Kirby said there was nothing in the files to suggest the solicitors had discussed costs with the client, and no explanation what it meant by charging a 100% success fee or how that would be calculated. He added: ‘Solicitors are supposed to send out estimates and documents setting out charging rates. Were this appeal to be allowed the consumer’s right, which has been there for several hundred years, to challenge the solicitor’s bill will have been greatly abrogated.’
Kirby said the client would clearly have challenged the £349 ATE insurance premium had it appeared as an item on her bill, and ‘undoubtedly’ having seen the terms of the cover it would have been questioned.
He said the court had been right to treat the ATE as a disbursement and that insurance was ‘part and parcel’ of the costs package presented to her by the firm.
Judgment was reserved by the Master of the Rolls.