CA to hear appeal on ‘informed consent’ to PI damages deduction

Males: Permission granted

The Court of Appeal has agreed to consider whether personal injury (PI) clients need to give informed consent to paying their solicitor more costs than could have been recovered.

Lord Justice Males granted permission to appeal Belsner v Cam Legal Services Ltd [2020] EWHC 2755 (QB), a decision that Mr Justice Lavender recognised was a test case.

The High Court ruled that law firms had to spell out in detail in their retainers the costs clients could be liable for beyond what is recovered from defendants, rather than just warning in broad terms of a potential liability, so as to amount to informed consent.

Even if they ultimately capped their recovery, as Cam Legal did here, this too needed to be included in the retainer.

Checkmylegalfees, which acts for the claimant, said after the ruling that millions of clients may have claims a result.

Section 74(3) of the Solicitors Act 1974 says the amount allowed on assessment cannot exceed what the court would have allowed as between party and party.

However, CPR 46.9(2) says this can be overridden by written agreement “which expressly permits payment to the solicitor of an amount of costs greater than that which the client could have recovered from another party to the proceedings”.

The question was whether this required informed consent. At first instance, District Judge Bellamy found that the paperwork given to Ms Belsner made it clear that Cam Legal would seek to recover any shortfall in costs not recovered and decided that to require informed consent “places the burden too high”.

Granting permission, Males LJ said that, while there were good reasons to require that the consequences be spelt out, the retainer did appear to meet the conditions of CPR 46.9(2) and so the appeal had a real prospect of success.

The publicity generated by Checkmylegalfees around the decision meant the case was suitable for a second appeal, he went on.

Ged Courtney, the senior costs draftsman at cost firm Kain Knight handling the case, said: “The granting of permission for a second appeal together with the inferences we can draw from the court’s preliminary view is extremely encouraging and matches our own and our client’s expectations as to the prospects of ultimately succeeding on this appeal.

“It is particularly encouraging to see Males LJ recognising that, on a literal interpretation of CPR.46.9(2), Cam Legal’s agreement did meet the requirements of that rule.

“The court was asked to restrict the grounds of appeal and to impose costs conditions in the event that the permission was granted but Males LJ did neither leaving all of the arguments open for determination with the unsuccessful party being responsible for the costs in the usual way.

“We hope legal profession can take some reassurance from the fact that there should be a final resolution of issues relating to informed consent and solicitor’s CFAs either later this year or early next.”

Mark Carlisle, the founder of Checkmylegalfees, said: “We are looking forward to seeing what the Court of Appeal says about the new fiduciary duties argument, which was not raised at all before Mr.Justice Lavender.

“It’s a sad state of affairs though when the personal injury market has to resort to arguing that it owes no fiduciary duties at all until a vulnerable client who knows nothing at all about the law has signed on the dotted line.”

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