“Virtually impossible” for solicitors to claim success fees in cases involving children

Injured child

Conflict of interest between children and their solicitors

The Civil Procedure Rule Committee is to investigate claims that the Jackson reforms have made it “virtually impossible” for solicitors to claim success fees in cases involving children, it has emerged.

Committee member HHJ Halbert told its May meeting that in his opinion a rule change would be needed before lawyers acting for children can claim success fees from damages, now that they can no longer be claimed from defendants.

His comments came in a supplement to a paper on the issue by District Judge Hovington, who said that a number of his colleagues had highlighted the problem of child victims and success fees.

Judge Halbert outlined the basic facts of an appeal by a law firm against a district judge’s refusal to allow payment out of a child’s damages.

The case, which was anonymised, settled with payment to the child of £2,700 plus costs, and a success fee of £675. The district judge hearing the case approved the settlement, but not the payment of success fees.

“There are major problems with this case,” Judge Halbert said. “The first is the status of the appeal. The appeal has been lodged by the solicitors. Neither the litigation friend, nor the defendant, have any interest in the outcome of the appeal.

“In reality the parties in the appeal are the solicitors and the child. The solicitors are not parties to the action so they have no locus standi to appeal. To do so, they are acting in conflict with their interests of their own client, namely the child.”

Judge Halbert said he had raised the matter with the Supreme Court Costs Office, which took the same view that the solicitors had no locus.

The judge said that there was a further problem over the basis on which the appeal could be funded.

“The money cannot come out of the child’s damages without the leave of the court, and there is no chance that this will be granted.”

In response, the rule committee decided that a review of the rules was necessary and, “in view of the complexity of the problem”, a sub-committee should be set up to identify the issues and how they could be addressed in the rules, with DJ Hovington as chair.

In his paper, DJ Hovington said concern had been expressed that while detailed assessment of costs could be disproportionate by reference to the amounts involved, the rules were unclear as to when summary assessments could be made.

He said that it was likely that in order to dispense with the requirement for detailed assessment, judges may need the kind of detailed information which could only be provided where the detailed procedure was followed.

DJ Hovington added that, where detailed assessments were carried out, there were the “further complications” of the conflict of interest between solicitor and child, and the costs for the child exceeding the 10% uplift in general damages.



    Readers Comments

  • Dominic Finn says:

    Someone should have explained to the learned judge that the Litigation Friend would most likely have had an interest in the appeal insofar as the LF is liable to the solicitors for their costs and success fee upon conclusion (assuming a model CFA was used).

    That LF, who apparently had no interest in the appeal, will no be writing a cheque for £675.00 and will not have access to the damages, or the 10% uplift in those damages, to pay it or contribute toward it.

  • Dominic Finn says:

    All that is required is a very simple amendment to CPR 21.12 (2) to allow success fees to be paid out of the damages – it already provides for ATE premiums and loan interest to be paid out of a child’s damages.
    Not a “complex problem” at all.

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