Brendan Duffield v WW Morrison Supermarkets Ltd [2025] EWCC 35

[2025] EWCC 35Claim No 099DC416
IN THE COUNTY COURT AT CENTRAL LONDON
Thomas More Building
Venue Royal Courts of Justice StrandDate 1 July 2025
London WC2A 2LL
Before
HIS HONOUR JUDGE MONTY KC
Between
WM MORRISON SUPERMARKETS LTDDefendant
Ms Nyssa Crorie (Barrister and Partner at Express Solicitors) for Ms MatuleviciuteHearing Hearing date: 25 June 2025
Approved Judgment

HHJ Monty KC:

[1]On 25 April 2022, the Claimant (then aged 5) and his mother were in a supermarket operated by the Defendant when the Claimant was injured. He brought a claim against the Defendant. His mother, Ms Matuleviciute, was his litigation friend. Express Solicitors were instructed by Ms Matuleviciute to act for the Claimant on a conditional fee agreement (“CFA”), and Ms Matuleviciute took out an after the event insurance policy (“ATE”). The CFA provided for a 100% uplift on the solicitors’ base costs. The ATE premium was £650 plus IPT.[2]Proceedings were issued on 21 August 2023. Liability was in dispute. The parties were able to settle the claim for the payment of £2,250 in damages, and the matter was listed before Deputy District Judge Walton (“the judge”) on 2 October 2024(a) to approve the settlement, and(b) to consider Ms Matuleviciute’s request for deduction of her reasonable expenses from the damages. The reasonable expenses sought were a success fee of £450, and the ATE premium in the sum of £675 (I shall explain how these figures were arrived at shortly).[3]The judge approved the settlement, allowed the deduction of a success fee of £225, but refused to allow any deduction for the ATE premium.[4]The Defendant has since made various payments in accordance with the judge’s order, namely(a) £225 to Express Solicitors for the success fee,(b) £2,025 into the Court Funds Office, and(c) the Claimant’s costs.[5]On 23 October 2024, Ms Matuleviciute filed an Appellant’s Notice, seeking to appeal the judge’s refusal to allow the ATE premium and the whole of the £450 success fee. Ms Matuleviciute, although not a party to the claim, is nonetheless entitled to appeal the decision: MA Holdings Ltd v George Wimpey UK Ltd [2008] 1 WLR 1649, [17-19]. Permission to appeal was granted by HHJ Johns KC on 16 January 2025.[6]The appeal was unopposed. Having read all the documents, at the start of the appeal hearing I told Ms Crorie, counsel for Ms Matuleviciute, that I would allow the appeal, and that I would set out my reasons in a written judgment. This was in part because Ms Crorie told me anecdotally that the errors into which the judge had, in my view and with respect, fallen are not uncommon; I was concerned to hear that, and it seemed to me that a written judgment might assist those who have to deal with similar issues in other cases.[7]Whilst each case will, of course, turn on its own facts, the matters of principle with which I am concerned on this appeal are, I think, of general application.

The law

[8]The relevant provisions of the Civil Procedure Rules (“CPR”) are set out below.[9]CPR 21.12 permits a Litigation Friend to apply to deduct the costs and expenses of litigation from a child claimant’s damages:
“(1) In proceedings to which rule 21.11 applies, a litigation friend who incurs costs or expenses on behalf of a child or protected party in any proceedings is entitled on application to recover the amount paid or payable out of any money recovered or paid into court to the extent that it— (a) has been reasonably incurred; and (b) is reasonable in amount.”
[10]A success fee is deemed to be a cost, and an ATE premium is deemed to be an expense, for these purposes. CPR 21.12(2) and (3) provide: (2) Costs recoverable in respect of a child under this rule are limited to … (b) costs incurred by way of a success fee under a conditional fee agreement or sum payable under a damages based agreement in a claim for damages for personal injury where the damages agreed or ordered to be paid do not exceed £25,000, where such costs have been summarily assessed under rule 46.4(5); … (3). Expenses may include all or part of— (a) a premium in respect of a costs insurance policy (as defined by section 58C(5) of the Courts and Legal Services Act 1990);”[11]CPR 21.12(5) and (6) provide:
“(5) In deciding whether the costs or expenses were reasonably incurred and reasonable in amount, the court will have regard to all the circumstances of the caseincluding the factors set out in rule 44.4(3) and 46.9. (6) When the court is considering the factors to be taken into account in assessing the reasonableness of the costs or expenses, it will have regard to the facts and circumstances as they reasonably appeared to the litigation friend or to the child’s or protected party’s legal representative or deputy when the cost or expense was incurred.”
[12]The amount which may be deducted is restricted where the damages are less than £5,000. CPR 21.12(7) and (8) provide: “(7) Subject to paragraph (8), where the claim is settled or compromised, or judgment is given, on terms that an amount not exceeding £5,000 is paid to the child or protected party, the total amount the litigation friend may recover under paragraph (1) must not exceed 25% of the sum so agreed or awarded, unless the court directs otherwise. Such total amount must not exceed 50% of the sum so agreed or awarded. (8) The amount which the litigation friend may recover under paragraph (1) in respect of costs must not (in proceedings at first instance) exceed 25% of the amount of the sum agreed or awarded in respect of—(a) general damages for pain, suffering and loss of amenity; and(b) damages for past financial loss”.[13]CPR 46 deals with the basis of detailed assessment of solicitor and client costs. CPR 46.9(3) provides:
“(3) Subject to paragraph (2), costs are to be assessed on the indemnity basis but are to be presumed – (a) to have been reasonably incurred if they were incurred with the express or implied approval of the client; (b) to be reasonable in amount if their amount was expressly or impliedly approved by the client; (c) to have been unreasonably incurred if— (i) they are of an unusual nature or amount; and (ii) the solicitor did not tell the client that as a result the costs might not be recovered from the other party.” (a) to have been reasonably incurred if they were incurred with the express or implied approval of the client; (b) to be reasonable in amount if their amount was expressly or impliedly approved by the client; (c) to have been unreasonably incurred if— (i) they are of an unusual nature or amount; and (ii) the solicitor did not tell the client that as a result the costs might not be recovered from the other party.”
[14]CPR 44.3(3) provides:
“(3) Where the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party.”
[15]The question of what can properly be deducted from damages has been the subject of a number of relevant decisions.[16]In Herbert v HH Law Ltd [2019] EWCA Civ 527 at [68-71], it was held that an ATE premium is not a disbursement, and it is essentially beyond challenge at solicitor and own client level.[17]In West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 at [56-57], the Court of Appeal addressed the question of recoverability of an ATE premium inter partes and set out the following relevant principles “applicable to any consideration of the reasonableness of an ATE insurance policy”:
“i) Disputes about the reasonableness and recoverability of the ATE insurance premium are not to be decided on the usual case-by-case basis. Questions of reasonableness are settled at a macro level by reference to the general run of cases and the macro-economics of the ATE insurance market, and not by reference to the facts in any specific case. ii) Issues of reasonableness go beyond the dictates of a particular case and include the unavoidable characteristics of the ATE insurance market. iii) District judges and cost judges do not have the expertise to judge the reasonableness of a premium except in very broad-brush terms, and the viability of the ATE market will be imperilled if they regard themselves (without the assistance of expert evidence) as better qualified than the underwriter to rate the financial risk the insurer faces. iv) It is for the paying party to raise a substantive issue as to the reasonableness of the premium which will generally only be capable of being resolved by way of expert evidence.”
[18]The court in West v Stockport NHS Foundation Trust said that “Access to justice must therefore be the starting point for any debate about the recoverability of ATE insurance premiums in any dispute about costs”: [12]. The court went on to say that “there is a clear risk that an issue (such as the recoverability of a fixed premium), which ought to be the subject of clear guidance with minimal room for debate, is being decided on an ad hoc, case-by-case basis”: [28].[19]I have also drawn some assistance from the decision of HHJ Lethem in Master XX v H&M Hennes and another (“Hennes”), an unreported decision of 21 April 2022 on facts which are not dissimilar to those in the present case.[20]Readers of this judgment might also be assisted by the helpful commentary written by Mr Roger Mallalieu KC in Costs & Funding following the Civil Justice Reforms: Questions & Answers (11th Edition), particularly at 9-17 to 9-19.

The issues before the judge

[21]Ms Matuleviciute’s request was supported (as mandated by CPR 21.12(10)) by her witness statement, in which she confirmed that she had made an informed decision to pursue this litigation, on behalf of her son, funded by a CFA, and that she understood how the CFA operated; and similarly she had made an informed decision to take out an ATE, to guard against the risks of adverse litigation costs, and that the costs of doing so were made clear to her.[22]Also before the court was a witness statement of Miss Brickell, a solicitor with Express Solicitors, in which the basis for the calculation of the success fee was set out, pursuant to CPR 21.12(7)-(8). The total amount of deductions sought could not exceed 50% of the damages, which was £1,125. The costs could not be more than £562.50, which was 25% of the damages. The ATE premium was £650 plus IPT at 12%, a total of £728.00. If this was added to the original £562.50 success fee, the total deductions would equate to £1,290.50. As there is no entitlement to a deduction exceeding £1,125.00, the deductions had to be reduced by £165.50 to align with the mandatory cap. The total deductions from damages sought were the reduced figures of £675 + £450 = £1,125, which was 50% of the £2,250 damages.

The hearing

[23]I have had the benefit of reading the transcript of the hearing before the judge. The judge accepted – it appears with some reluctance – that there had been a risk assessment pursuant to CPR PD21.11.3(2) by reference to which the success fee had been determined. It is clear from the transcript that the judge was not impressed that the success fee was set at 100%, which they regarded as far too high. The judge then turned to the ATE premium, and commented:
“We have got damages of £2,250 and we have got approximately 50% of that being eaten up in success fee and ATE premium. Which is disproportionate.”
Shortly thereafter, the judge said, “But what I am getting to, is whether it is reasonable – so, any expense such as an ATE premium has to be reasonably incurred. And the question I am grappling with, is whether a £675 ATE premium was reasonably incurred in the context of this claim.” Counsel for Ms Matuleviciute, Mr Antanian, submitted that there were two factors to consider. First, whether it was reasonably, incurred, and secondly, whether it is reasonable in amount. Mr Antanian referred the judge to West v Stockport NHS Foundation Trust (as to which see paragraph 17 above), and submitted that as set out in that case, the only real issue from that case was whether the premium was reasonable in amount. The judge then addressed Ms Matuleviciute directly, and asked for her views about the success fee and the ATE premium. Mr Antanian then briefly addressed the judge again, and the judge gave a judgment.

The judgment

[24]The judgment is relatively short, and I will set it out in full. “DDJ WALTON: 1. Therefore, there are two separate deductions from the Claimant’s agreed sum of damages that I am asked to consider. The first is a success fee of £450 under a form of conditional fee or damages based agreement. The second is a premium under a costs based insurance policy of £675. 2. Under CPR 21.12, a Litigation Friend who incurs costs or expenses on behalf of a child is entitled to recover the amount of any such cost or expense to the extent that it has been reasonably incurred and is reasonable in amount. In deciding whether any cost or expense was reasonably incurred and reasonable in amount, I am required to have regard to all the circumstances of the case including the factors set out in CPR 44.4(3) and 46.9. 3. However, stepping back and focusing on the broader picture, I am presented with a situation where the Claimant acting through his Litigation Friend has accepted an award of damages of £2,250 and yet I am being asked to approve deductions from those damages which amount to approximately 50% of the total sum of the Claimant’s damages. As mentioned, that is £450 for a success fee and £675 for an ATE premium. 4. In relation to the deduction constituted by the proposed success fee of £450, I have taken into account the requirements of CPR 21.12 (10) which I found are met, although I focussed particularly on the risk assessment form which, as I have said, does not appear to be a particularly comprehensive risk assessment. It seems to say what has not been done rather than what has been considered. However, I am willing to accept that a risk assessment in name, albeit not a particularly helpful or considered one, has been provided for the purposes of CPR 21.12 (10). 5. So, in considering the amount of the success fee that is proposed as a cost deduction, I take into account the general approach of Simmons v Castle [2012] EWCA Civ 1039 and allow the deduction of a success fee, but, in the circumstances, I will limit that success fee to 10% of the agreed damages. That is 10% of damages which will be £225. 6. In relation to the ATE premium, whilst an expense may include all or part of a premium in respect of a costs insurance policy, I do need to consider whether it was an expense that was reasonably incurred and reasonable in amount having regard to all the circumstances and the factors set out in CPR 44.4(3) and 46.9. 7. I am not persuaded that, in the circumstances of this case, it was reasonable to incur a premium of £675 in relation to a costs insurance policy. This issue is not with the amount of the premium but with the fact that it was incurred at all. This was an accident that Brendan unfortunately suffered on the premises of Morrisons when he pulled a loose cabinet on to his foot. This is a personal injury case in which Qualified one-way cost shifting would apply. In the circumstances, it is difficult to see what, if any, risk could arise of the Claimant being required to pay the Defendant’s costs. The Claimant’s solicitors will have separately recovered an agreed amount of their costs from the Defendant. In addition, in a case such as this, it would be reasonable to expect that Morrisons would settle the case, which indeed they have. 8. So, any potential risk to the Claimant that might have been covered by a costs based insurance policy is not a risk that would, in the circumstances of this case, be one for which it would be reasonable to incur a premium for a costs based insurance policy. In the circumstances, there would be no reasonable expectation of the Claimant being at risk of paying the Claimant’s costs and it is therefore, difficult to see how such a deduction from the Claimant’s damages would have been reasonably incurred. 9. Therefore, I will allow the deduction from the Claimant’s damages of a £225 success fee but not a deduction of £675 for the premium for a costs based insurance policy.”

Post-judgment

[25]Mr Antanian took the judge to the CFA and explained that it provided for an uplift on base costs, whereas the judge had decided to make a 10% uplift on the damages. The judge explained, “But I am awarding 10% of damages. So, I am following Simmons v Castle [2012] EWCA Civ 1039. So, there, the award is 10% of damages, not 10% of costs.” Mr Antanian submitted that this was contrary to the provisions of the CFA, and the judge said, “So, whatever your contract says, is interesting, but it is not determinative to me of how I can assess costs. And so, I assess costs on a different basis. And the basis on which I have assessed the costs is 10% of damages.”

Discussion

[26]The appeal court will allow an appeal where the decision of the lower court was “(a) wrong; or (b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court”: CPR 52.21(3).[27]The White Book 2025 at paragraph 52.21.5 explains that “wrong” in CPR 52.21(3)(a) means that the court below(i) erred in law or(ii) erred in fact or(iii) erred (to the appropriate extent) in the exercise of its discretion, and summarises the following principles (which are those I apply when considering this appeal): (i) Reasons for judgment will always be capable of having been better expressed. A judge's reasons should be read on the assumption that the judge knew (unless they have demonstrated to the contrary) how they should perform their functions and which matters they should take into account: Re C (A Child) (Adoption: Placement order) (Practice Note) [2013] EWCA Civ 431; [2013] 1 WLR 3720, CA, at [39] per Sir James Munby P; Piglowska v Piglowski [1999] 1 WLR 1360, HL, at 1372 per Lord Hoffmann); (ii) An appellate court should resist the temptation to subvert the principle that they should not substitute their own discretion for that of the judge by a narrow textual analysis which enables them to claim that they misdirected themselves (see the cases above); (iii) There are some cases where the first instance judge has made a decision which involved the assessment and balancing of a large number of factors, for example determining whether an action constitutes abuse of process. Such a decision is not an exercise of discretion, because there is only one right answer to the question before the judge. An appellate court will be reluctant to interfere with such a decision.(iv) However, an appellate court will interfere if the judge has taken into account immaterial factors, omitted to take into account material factors, erred in principle or come to a decision that was impermissible: see Aldi Stores Ltd v WSP Group Plc [2007] EWCA Civ 1260; [2008] 1 WLR 748, CA, at [16]; [2008] 1 WLR 748; or if the judge's decision was “plainly wrong”: see Stuart v Goldberg [2008] EWCA Civ 2; [2008] 1 WLR 823, CA, at [76] and [81]; and(v) In determining whether the decision of the lower court was “wrong” for the purposes of r.52.21(3)(a), regard must be had to the way in which the parties' cases were formulated below: see King v Telegraph Group Ltd [2004] EWCA Civ 613; [2005] 1 WLR 2282, CA, at [54].

The success fee

[28]In my view, and with respect, the judge’s approach to the calculation of success fee was wrong.[29]The judge decided that a success fee was reasonably incurred. There is obviously no challenge to that finding.[30]Where things went wrong was that the judge seems to have treated the quantification of the success fee as if it were inter partes costs or had some relevance to the damages award.[31]Success fees are a matter of contract between the contracting parties. Here, the success fee was 100%.[32]What the judge did was to award a success fee of 10% of the damages, relying expressly on Simmons v Castle. That was a decision of the Court of Appeal from July 2012, in which the court set out “the future approach to the measure of general damages in tort actions” [6]. The focus was on the guideline rates for general damages in personal injury cases, which are set out in the Guidelines for the Assessment of General Damages for Personal Injury published by the Judicial College. At [12], the Lord Chief Justice said that “this court has not merely the power, but a positive duty, to monitor, and where appropriate to alter, the guideline rates for general damages in personal injury actions.” The court went on to set out an increase in general damages of 10% to all cases where judgment is given after 1 April 2013. At [20] the Lord Chief Justice said, “Accordingly, we take this opportunity to declare that, with effect from 1 April 2013, the proper level of general damages for(i) pain, suffering and loss of amenity in respect of personal injury,(ii) nuisance,(iii) defamation and(iv) all other torts which cause suffering, inconvenience or distress to individuals, will be 10% higher than previously.”[33]Subsequent editions of the Judicial College Guidelines reflected the Simmons v Castle 10% uplift as was explained in the Introduction to several editions, and these have been incorporated into the guideline rates such that the Introduction to the latest (17th) edition no longer has a reference to Simmons v Castle; the Introduction to the 16th edition said, “Some important changes have been introduced in this edition. We have decided to remove figures for general damages which do not include the Simmons 10% uplift. Apart from mesothelioma cases, there are now likely to be vanishingly few ongoing cases in which the pre-uplift figures will be relevant. The view of the editorial team is that the number is now insufficient to justify the inclusion of both figures.”[34]In my judgment, it was not open to the judge to determine the amount of the deductible success fee by reference to a Simmons 10% uplift on damages. The Simmons uplift has nothing to do with the contractual recovery of a success fee between contracting parties. That success fee will – in appropriate cases, such as the present one – be subject to the limitation on recovery imposed by CPR 21.12, but the basis is contractual. I observe that for the purposes of this appeal, it did not matter that the judge held that 10% was reasonable, as even at 10% of base fees the success fee was more than the capped figure.[35]I of course accept that a success fee falls within “costs” under CPR 21.12 and that the court is directed to have regard to CPR 46.9 and CPR 44.4(3). The latter rule sets out the factors to which the court “will also have regard” in deciding the amount of costs (sometimes referred to as “the eight pillars of wisdom”):
“(a) the conduct of all the parties, including in particular – (i) conduct before, as well as during, the proceedings; and (ii) the efforts made, if any, before and during the proceedings in order to try to resolve the dispute; (b) the amount or value of any money or property involved; (c) the importance of the matter to all the parties; (d) the particular complexity of the matter or the difficulty or novelty of the questions raised; (e) the skill, effort, specialised knowledge and responsibility involved; (f) the time spent on the case; (g) the place where and the circumstances in which work or any part of it was done; and (h) the receiving party’s last approved or agreed budget.”
[36]The court must also have regard to CPR 46.9 and thus the fact that were there to be an assessment between the solicitor and the litigation friend, it would be on an indemnity basis. This means, in my view, that if the court departs from CPR 46.9, it renders the litigation friend vulnerable to being personally liable for costs which are not permitted under CPR 21.12 but are not open to challenge as between the litigation friend and the solicitor. In so finding, I am agreeing with, and adopting the words of, HHJ Lethem in Hennes at [13]:
“Thus the effect of that recognition is that the Court is likely to start from a presumption that providing the litigation friend has approved the costs, they have been reasonably incurred and are reasonable in amount. Secondly, the judge is likely to start from the assumption that the costs are proportionate.”
[37]Returning to the success fee, I really cannot understand how it could be appropriate to quantify the success fee by reference to (a percentage of) the damages. Even taking into account the “eight pillars of wisdom”, against the background of(a) a contractual arrangement between the solicitors and Ms Matuleviciute(b) which provides for an uplift on costs not damages(c) in circumstances where Ms Matuleviciute entered freely into the contract and understood its terms, it strikes me as wrong in principle to depart from the contractual provisions, which base the uplift on costs not damages. In any event, the Simmons 10% uplift is to do with damages, not costs as between the litigation friend and the solicitors.[38]It seems to me that the judge was wrong in principle about the quantum of the success fee. This is not a disagreement about the exercise of a discretion. It seems to me that the judge failed to apply the presumptions and assumptions in CPR 46.9. In particular, there is a presumption that solicitor and own client costs have been reasonably incurred if they were incurred with the express or implied informed approval of the client. That was the position here, on Ms Matuleviciute’s evidence. There was nothing to rebut that presumption.[39]The correct approach in relation to the success fee should have been that set out in Herbert v HH Law Ltd at [33-36]. “33. It is common ground that CPR 46.9(3) and (4) must be read together.34. CPR 46.9(3) gives rise to presumptions about the reasonableness or unreasonableness of costs on a detailed assessment of solicitor client costs in the three circumstances specified in CPR 46.9(3)(a), (b) and (c). In the case of (a) and (b) the presumption is that the costs were reasonably incurred and reasonable in amount. In the case of (c) the presumption is that the costs were unreasonably incurred.35. There is no longer any dispute between the parties in relation to CPR 46.9(3)(c). The Judge recorded (at [27]) that Mr Andrew Hogan, counsel for HH before him and junior counsel for HH before us, accepted that an irrecoverable success fee could be regarded as a cost of an ‘unusual nature or amount’ but had submitted that, as the retainer made it clear that the success fee could not be recovered from the other party, the condition in CPR 46.9(3) (c)(ii) was not satisfied, and so there was no presumption under CPR 46.9(3)(c) that it was unreasonably incurred. The Judge agreed with that submission (at [47]). There is no respondent's notice challenging that decision.36. Accordingly, so far as concerns the success fee, the only issue is whether or not Ms Herbert expressly or impliedly approved the imposition of the success fee and its amount so as to give rise to the presumption in CPR 46.9(3)(a) that it was reasonably incurred and the presumption in CPR 46.9(3)(b) that it was reasonable in amount.37. Counsel were agreed before us that the Judge was correct to hold that ‘approval’ in CPR 46.9(3)(a) and (b) means informed approval in the sense that the approval was given following a full and fair explanation to the client (although there was dispute between them as to the reasoning and significance of the Macdougall case cited by the Judge). We agree.38. There was some debate before us as to whether it is the client who bears the burden of satisfying the court that express or implied approval was not given or it is the solicitor who bears the burden of satisfying the court that it was given. We consider that where, as here, the client brings proceedings under the Solicitors Act 1974 s.70(1), it is for the client to state the point of dispute and the grounds for it. If the solicitor wishes to rebut the challenge by relying on the presumption in CPR 46.9(3)(a) or (b), the burden lies on the solicitor to show that the pre-condition of the presumption, informed approval, is satisfied. Once the solicitor has adduced evidence to show that the client gave informed consent, the evidential burden will move to the client to show why, as a result of having been given insufficiently clear or accurate or comprehensive information by the solicitor or for some other reason, there was no consent or it was not informed consent. The overall burden of showing that informed consent was given remains on the solicitor.”[40]In the present case, there was evidence which the judge accepted from Ms Matuleviciute that she had given her informed consent to the success fee. As there was no basis for calculating the success fee by reference to the damages, in my respectful view the judge was wrong in concluding that the success fee should be limited to £225.

The ATE premium

[41]I refer back to the principles set out in West v Stockport NHS Foundation Trust: see paragraph 17 above.[42]It makes no sense to have allowed a success fee (which the judge did, even though for the reasons I have set out above it was in the wrong amount) but to have refused to allow the deduction of the ATE premium. I agree with Ms Crorie that having held, correctly, that there was a litigation risk in this case, it was not open for them to find that it was unreasonable for Ms Matuleviciute to have insured against that risk. As HHJ Lethem pithily put it in Hennes:
“… there is within the judgment an inherent contradiction and tension between allowing the success fee and then disallowing the ATE premium upon which it was based.”
[43]In Hennes, HHJ Lethem also said: “14. However, it is open to the judge to depart from that initial starting-off point, and indeed were that not to be the case, then there would be no reference to Rule 44.4(3) with of course the ‘eight pillars of wisdom’ which would guide a judge in deciding whether to depart from the initial starting off point. Thus, it may be that there are factors found in 44.4(3) or in any other circumstances of the case that would cause the Court to depart from those presumptions. That would depend on the factors engaged in each particular case. Where there is evidence that undermines the starting off point of proportionality and reasonableness, then the Court is entitled to take into account those factors and to decide that the ATE premium should not be deducted from the child’s damages. What is not open to the court is to simply say that the premium was unreasonable in amount on a case by case basis (see West)”.[44]Again, I agree. For the reasons set out in West v Stockport NHS Foundation Trust, the premium amount is not to be decided by reference to the facts in any particular case.[45]That same tension is apparent from the judge’s judgment. In my view, the judge failed properly to apply CPR 21.12(4) and failed to have proper regard to CPR 46.9. From my reading of the transcript (both before and after judgment) and the judgment, the judge seems to have started from the proposition that the total deductions sought were too high, and then fashioned a way of reducing them. That with respect was the wrong approach.[46]In my view, for those reasons, the judge was wrong to have said that the ATE premium was disproportionate (see paragraph 23 above), and wrong in the judgment to have concluded that it was not reasonable to enter into the ATE at all (judgment, paragraphs 7-8). I do of course note that the judge expressly said that the ATE issue was “not with the amount of the premium but with the fact that it was incurred at all”. But it does seem to me that the judge’s conclusion was affected by the views expressed during oral argument about the amount of the premium and the effect on the damages in the hands of the Claimant.[47]Again, I agree with Ms Crorie that the judgment shows that the judge agreed that there were costs risks against which insurance might be taken out, but was wrong in determining that the risks were so low or unlikely that there was no need for the ATE.[48]In my view the judge was wrong in the reasons given for disallowing the premium. These are as follows:(1) Qualified One-Way Costs Shifting (“QOCS”) applies. As Ms Crorie says, QOCS relates to enforcement, not the principle, of a costs order. Even where QOCS applies, a child claimant is at risk of losing their damages if an adverse costs order is made against them.(2) It was difficult to see how there was any risk of the Claimant having to pay costs. I also agree with Ms Crorie that the risks against which protection is provided by an ATE go further than an adverse costs order, and may include liability for other disbursements such as second opinion medical reports. I further agree that an adverse costs risk is present notwithstanding QOCS - for example, the effect of any Part 36 offer. A similar point was made in BXC v DTA [2021] EWHC B27 (Costs) at [87]. This point also seems to me to ignore the general risk inherent in all litigation.(3) Express Solicitors have separately recovered their costs. That is incorrectly looking at matters as at the hearing, rather than at the time the ATE was taken out.(4) It would have been reasonable to expect the case to settle. I am not at all convinced by that. Liability had been denied. I do not think it possible to say with certainty that it was bound to settle.[49]I have no doubt that the ATE was reasonably entered into, and that the judge’s conclusion to the contrary was not just an exercise of discretion with which I disagree, but was wrong. Having assessed the success fee at 10%, that meant that there was a risk attached to the litigation which meant that the cost of the premium was deductible. That being so, I have no hesitation in concluding that the premium ought to have been allowed as a deduction in full. The approach to these issues Success fee:

The approach to these issues

[50]The issue here is what amount is permitted to be deducted from the damages pursuant to CPR 21. The amount has to be reasonable: CPR 21.12. Proportionality of the premium is not relevant, and the court must follow a structured approach: Herbert v HH Law Ltd; West v Stockport NHS Foundation Trust. Where there is a risk assessment before the court (a requirement: CPR PD 21.11.3(2)), which is a document intended to provide material upon which the court can assess the reasonableness of the success fee, the court must decide whether reasonable consent was given by the litigation friend/litigant so as to engage the presumption under CPR46.9(3)(a) and (b).[51]The proper approach should be:(1) is there material before the court that causes it to question whether informed consent was given?(2) if so, what evidence was there that informed consent was given (the burden of proof is on the solicitor for the litigation friend/solicitor)?(3) if the court is not satisfied that informed consent was given, then following Herbert v HH Law Ltd the success fee should normally be disallowed; if the court is so satisfied, the success fee should be allowed.

ATE Premium:

[52]The proportionality of the premium is not an issue: West v Stockport NHS Foundation Trust. If deduction of a success fee is allowed, it would be wrong not to allow deduction of the premium.

Disposal

[53]For these reasons, the appeal is allowed. I will order that Ms Matuleviciute is entitled to deduct from the damages(a) the success fee in the sum of £450, and(b) the ATE premium in the sum of £675. I will vary paragraph 3 of the judge’s judgment accordingly and authorise a payment out from the Court Funds Office of £900 (being £675 for the premium and an additional £225 to make up the balance of the £450). (End of judgment)