Report comment

Please fill in the form to report an unsuitable comment. Please state which comment is of concern and why. It will be sent to our moderator for review.

Comment

Has anybody actually understood the judgment, or the types of retainer available? The DJ's decision was not only perfectly predictable, but correct.

If you have a CFA with success fee, then you are entitled to charge your fees together with a success fee. So far so good. Not difficult.

However, the success fee has to reflect the risk of losing, and can not be more than 100%.

OK so far.

A success fee is an amount by which the normal charges are increased - section 58(4)(b) Courts and Legal Services Act 1990.

So there needs to be a "normal charge". This is then increased by a percentage of not more than 100%.

[Question number 1 - what is the "normal charge" and how was it calculated? The LPC 'agent' who represented the claimant didn't even know]

[Question number 2 - what is the success fee? Answer 100%. Why is it 100%? Again, the agent did not know.]

The amount of the success fee is then itself subject to a cap that it may not be more than 25% of the damages excluding the future losses.

Given that, how could anybody possibly expect it to be lawful simply to bill what you get paid from the other side, and then take 25% of the client's / child's damages, using a CFA? It simply isn't. The regulations and statute are very prescriptive:-

1) First you take "normal costs"
2) Then you apply a success fee (as to which it is bound to be an implied term that such fee represents an assessment of the risk of losing, and any express terms to the contrary probably breach consumer contracts legislation). Not 100%, although it may be, but a bespoke success fee.
3) Then you see if the success fee is more than or less than 25% of damages. If more then the success fee becomes 25% of damages; if less, then you only get the lower figure.
4) There is no requirement for a risk assessment, and it would be perfectly permissible to advise the DJ / Cost Judge that there is no risk assessment as one was not needed. But you can expect to be asked where the success fee came from and how it was calculated.
5) All this "portal RTA child whiplash cases are so risky, because you never know, they may put in a part 36 offer of £1,500 and we may reject it / they may have overexaggerated their claim and lose it all" is just drivel. Nobody can name one case of this happening in real life, and the chances of a factory claimant PI firm rejecting a Part 36 offer of £1,001 or above on a child whiplash are precisely nil. They're not risky, it's why you do them. And the client not being bothered to pursue it anymore / going to another firm / bringing a fraudulent claim are not risks that the success fee is meant to represent.

===

Of course you can avoid all of this by not using a CFA. There's no rule saying you have to use one. Neither do you have to charge a success fee. And if your normal charges happen to be more than the portal fixed costs, and you graciously cap the solicitor and own client element to 25% of damages, problem solved. There is an excellent blog by a well-respected commentator, who occasionally posts comments on these pages. I can't put the link or the Gazette Gestapo will delete it. But captain Google will find him. But his blog has the answers.

Your details

Cancel