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Supreme Court forces barristers to waive success fees


Neuberger: unusual approach in order to achieve a just result

The president of the Supreme Court has taken the “fairly remarkable” course of forcing two barristers into dropping their claims to success fees in a case which he said again highlighted the “many unsatisfactory aspects” of the pre-Jackson CFA regime.

The barristers – Nicholas Le Poidevin QC and Alexander Learmonth of New Square Chambers – acted for the unsuccessful defendant in last year’s high-profile case where a husband and wife signed each other’s wills, an error caused by their solicitor which the Supreme Court rectified.

As a result, the claimant in Marley v Rawlings and another inherited instead of the defendants/respondents.

In a costs judgment issued today, the Supreme Court ruled that the solicitor’s insurer should pick up the costs of the claimant for the entire litigation and for the respondents up to the Court of Appeal.

Giving the court’s unanimous judgment, Lord Neuberger said this was a “practical short-circuiting” of an order that the estate pays the costs, the estate be reimbursed by the solicitor and the solicitor be reimbursed by the insurer.

However, the position in relation to the respondents’ costs in the Supreme Court was complicated by the fact that their solicitors and two counsel were all instructed on CFAs.

The solicitors were only entitled to recover their disbursements under the terms of their CFA – which the court ruled was the limit of the insurer’s liability – but the counsels’ CFAs appeared to entitle them each to their full fee, including a 100% success fee, if the respondents’ costs were paid out of the estate, which effectively they were being.

Lord Neuberger said that given the respondents had lost, “it can be said with real force that their counsel are lucky to be getting anything. In my opinion, it would be quite inappropriate if any costs order resulted in the unsuccessful respondents’ counsel receiving a success fee”.

The president said he was prepared to include the barristers’ base costs in the order against the insurer, but was concerned that the success fee “may very well be recoverable from the respondents or from the solicitors (and if it could be recovered from the solicitors, it may very well be that they could recover the uplift from the insurer as ‘disbursements’)”.

Lord Neuberger said it would be “quite wrong to permit this” and told the barristers that unless they waived their success fees, the respondents would not be able to recover any costs from the insurer in relation to the Supreme Court appeal.

“This is, I appreciate, a fairly remarkable course to take, but the unusual facts of this case, coupled with the many unsatisfactory aspects of the CFA system under the Access to Justice Act 1999 (as illustrated in our very recent decision in Coventry v Lawrence [2]), appear to me to require and justify an unusual approach in order to achieve a just result.”

Lord Neuberger said that following distribution of the draft judgment, the barristers confirmed that they would disclaim entitlement to any success fees, meaning the insurer would be ordered to pay their base costs.