1 July 2014Print This Post

High Court backs cut of severe injury success fee from 75% to 30%

air bag

Crash: liability was hard to dispute

The High Court has backed a costs judge’s decision to cut a success fee charged by Irwin Mitchell, acting for a pedestrian whose back was broken when a car reversed over her, from 75% to 30%.

The costs litigation followed a settlement in 2012, under which the Motor Insurers’ Bureau (MIB) agreed to pay the woman £1.6m.

Mrs Justice Slade – sitting with Master Campbell – said it was not “impermissible” for the costs judge, Master Rowley, to conclude that, in the light of the involvement of the MIB, that the prospect of the claimant winning but not being able to recover costs was “negligible”.

Further, Master Rowley’s decision that the MIB would be hard pressed to contest liability was “amply supported by what was known at the time of entering the CFA”.

Slade J agreed with Master Rowley that the main risks for Irwin Mitchell were the risk of a part 36 offer and the complications that might follow a finding of contributory negligence.

She said allegations of contributory negligence included the fact that the vehicle’s lights were flashing and that the “claimant had a lack of awareness of the approach of the vehicle because of her pre-occupation with her mobile phone”.

Slade J said the costs judge referred to a Court of Appeal judgment, C v W, in which the court substituted a success fee of 20% for the risk of failure to beat a rejected part 36 offer. He also said that not all cases should be taken as having a 50/50 chance of success when they get to court so as to justify a 100% success fee.

Dismissing the appeal, Slade J ruled that the costs judge did not err in his approach to assessing a reasonable success fee. The claimant was ordered to pay the MIB’s costs for the appeal.

The court heard in Bright v Motor Insurers’ Bureau [2014] EWHC 1557 (QB), that Carol Bright suffered a severed spinal cord in the accident, leaving her tetraplegic.

Counsel for the claimants argued that base costs, as well as success fees, were at risk if the claimant lost and that the MIB refused to admit liability, unlike the situation in C v W. He argued that the costs judge had erred in his approach to the staging of the success fee, which was set at 50% for the initial work.

However, Slade J said: “The decision on a reasonable success fee was reached independently of the decision of the master as to staging.

“Since the material issue is whether the requested success fee of 75% was reasonable whether it was staged or not, the observations made earlier in this judgment about the approach of the Master to the issue of staging do not affect the outcome of the appeal.”

 

 

 

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