7 January 2016Print This Post

Retrospective success fee was justified, High Court rules

RCJ

Patterson J: the issue was a “matter of principle”

A law firm was justified in charging a retrospective success fee as the claimant did not face different risks when he signed a conditional fee agreement (CFA) as when he had applied for legal aid five months earlier, the High Court has ruled.

Mrs Justice Patterson overturned the ruling of Master Simons, who had found that there had been a change in risk in that period.

The court heard in Ghising v Secretary of State for the Home Department [2015] EWHC 3706 (QB) that Roshan Ghising was a dependant adult child of a veteran of the Gurkha Brigade who had settled in the UK.

Mr Ghising was denied entry clearance, but he was successful at the Court of Appeal in his part of a test case on the lawfulness of this decision brought against the Home Office in 2012.

Patterson J said the case was remitted to the Upper Tribunal, where the home secretary was ordered to pay costs in 2013. However, the parties failed to agree on quantum and the matter came before Master Simons in May 2015.

Howe & Co applied to the Legal Services Commission in July 2012 for legal aid to cover his appeal but the application was initially refused. A resubmission was made, but no decision was forthcoming from the Commission by the end of November.

With the hearing imminent, in December, Mr Ghising entered into a CFA with Howe & Co, which covered “all the work undertaken” by the solicitor involved, Christopher Jacobs, including all “interlocutory matters” from August.

The law firm argued that when it applied for legal aid, it ticked a box indicating the chance of success at between 60% and 80%, and when Mr Jacobs took over the case in late summer, he estimated the chances of success at 65% and the CFA put the success fee at 100%.

Master Simons ruled: “It is not for this court to make its own assessment of the risks in July and December, especially in a case such as this where it seems to me that the risks were so different, and this supports the view that the proper time to assess the risk is at the time of the entering into the CFA when one cannot use the benefit of hindsight and my judgment is that, in this particular case, these success fees should not be retrospective.”

Relying on Lord Neuberger’s ruling in Motto v Trafigura, Patterson J said the issue was “whether the costs judge went wrong on a point of law or principle, reached a conclusion which was plainly wrong, or took into account irrelevant evidence or misunderstood relevant evidence.”

Sitting with Master O’Hare as assessor, Patterson J said that although parts of Master Simons’ ruling were not “as pellucid as they might be”, he had correctly approached the issue of risk assessment.

“He said clearly that it was a fundamental aspect of a success fee claimed in the CFA that it was to be assessed at the time that the CFA was entered into without the benefit of hindsight. So far so good.”

However, Patterson J said she did not “understand what evidential basis the master had for saying that there was a different risk in July 2012 to that which there was in December 2012”. She noted that the 65% estimated in December was “self evidently within the bracket of success originally estimated by Howe & Co”.

She added that the wording of the CFA was not ambiguous and was “clearly capable of covering a retrospective position”. Patterson J allowed the appeal and said the parties had agreed that a further detailed costs assessment could be done on the papers.

By Nick Hilborne

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