Hanley v Smith & Anor [2009] EWHC 90144 (Costs)

[2009] EWHC 90144 (Costs)Case No HQ05X01554SCCO Reference CCD 0605404IN THE HIGH COURT OF JUSTICESUPREME COURT COSTS OFFICESupreme Court Costs OfficeClifford’s InnLondonEC4A 1DQDate 17 June 2009
Before
Deputy Master Victoria Williams
Between
PAUL KEITH HANLEYClaimantROBERT SMITHFirst DefendantTHE MOTOR INSURER’S BUREAUSecond Defendant
Mr Sydney Chawatama (counsel instructed by Julie Reynolds Solicitors) for ClaimantMr David Cooper (Costs Draftsman instructed by Greenwoods Solicitors) for DefendantsHearing Hearing date : 22 April 2009. Handed down 17 June 2009
JUDGMENT
[1]This is my judgment on two issues forming part of the points of dispute in this detailed assessment of the Claimant’s Bill. The underlying case is a personal injury claim arising from a motorcycle accident on 30 June 2003 in which the Claimant was a pillion passenger who sustained head and other injuries. The driver was the First Defendant who was uninsured. The case was a complex one. Mr Hanley suffered closed head injuries, was in a coma for 3 months and was ‘sectioned’ under the Mental Health Act. He was kept in residential care with a comprehensive care regime and not permitted to travel (such as to expert appointments) without being accompanied by a nurse or similar carer. He was not well enough to give evidence in his own case or to give adequate instructions and was a Patient throughout.[2]I will not summarise all issues in this technically difficult case but a flavour can be gleaned by considering that (at various stages) there were issues as to whether the motorcycle suffered from a latent defect such as would afford some defence to the First Defendant, whether the Claimant was knowingly allowing himself to be driven by an uninsured driver so as to render him ineligible for MIB cover (it also being alleged that the First Defendant was connected to the Claimant via a shared drug habit), whether the Claimant’s pre-existing serious conditions including epilepsy and a history of hepatitis due to drug use would have meant he would have needed care irrespective of the accident, whether following the accident his condition was so serious that he would probably never be released from compulsory Section under the Mental Health Act (affecting the extent of his need for damages relating to care), and to what extent (if he was ever released from residential section) there would be State funding for aspects of care also affecting a possible damages award. One of the other issues as to quantum was the question of life expectancy, which impacted upon future care needs.[3]The case proceeded at first on a standard retainer from April 2004 to 5 March 2006. Thereafter the solicitors acted under a Conditional Fee Agreement from 6 March 2006 onwards. As at the date of entry into the solicitor’s CFA the issue of negligence and liability as against the first defendant (the driver) had been resolved but not the extent of liability in percentage terms, or quantum, and nor had the question of eligibility for MIB cover been established (eligibility was in dispute on the basis that Mr Hanley was said to have known that the driver was uninsured). Junior counsel also acted under a CFA, with his CFA being dated 1/3/06. After the dates of solicitor and junior’s CFA’s, the issues of apportionment and eligibility settled shortly before a planned trial of the eligibility issue, on the basis of a 70% liability to be paid by the MIB and an order was made on 20 March 2006.[4]The case then proceeded as to quantum. Leading counsel was brought in (ultimately acting under a CFA, dated 10/10/07) for the quantum stage of the case after issues of eligibility and liability had been resolved but at a stage where life expectancy was significantly in issue and had been the subject of a Defendant’s Part 36 offer. The expected extent of State care of and the extent to which Mr Hanley would need to remain ‘sectioned’ under the Mental Health Act also both remained very much at large along with the over all quantum of the case.[5]Directions were made and substantial expert evidence obtained on both sides. There was intensive work with the experts on the part of the representatives for Mr Hanley. Leading counsel was I understand experienced in cases involving disputes about the extent of State funding of care. Ultimately at a joint settlement meeting an agreement was reached subject to court approval, for damages in the sum of £1.9m plus costs to be assessed on the standard basis if not agreed. The Court approved the settlement which was supported by advice by leading counsel.[6]The CFA agreements for solicitors and counsel each assumed risks arising from rejection of Part 36 offers. If the Claimant rejected a part 36 offer on advice, and later failed to beat that offer, the solicitors would not be entitled to fees after the latest date for acceptance of the offer. Junior and leading counsel’s CFA’s provided that in such a circumstance all counsel’s fees would be forfeited for the period after receipt of the notice of payment or offer.[7]Success fees were specified in the solicitor’s CFA at 100% (expressed as an overall success fee of 100% but with 10% of that figure representing cost of postponement of charges not claimable from the Defendants so that the claimed success fee in the Bill was 90%.) Leading counsel’s CFA provided a success fee of 82% and Junior counsel’s CFA provided a two stage success fee namely 50% rising to 100% if a trial brief had been delivered. I also had a note from leading counsel Mr Martin QC on the question of success fee and heard unsworn evidence from the solicitor for the Claimant who was questioned about the correct interpretation of the risk assessment documentation from which her firm’s success fee was derived.

Issues

[8]There are two issues before me. The remainder of the assessment has been concluded subject to those issues. They are as follows:(1) Whether the Claimant should be entitled to interest on costs under the Judgments Act 1838 s.17 from date of approval of the settlement.(2) What level of success fees are appropriate in this case for solicitors and for leading and junior counsel.[9]I was assisted on the above two issues by hearing argument from Mr Chawatama for the Claimant and from Mr Cooper for the Second Defendant. Both produced skeletons. (1). Interest on costs[10]The argument as to the date from which interest was claimed had been simplified by the concession by the Claimant that interest was claimed only from date of approval of the settlement. That reduced the point to two issues:(i) Did the court have a discretion under s.17 of the Judgments Act 1838 as amended, to adjust the interest awarded to reflect the actual extent to which the Claimant had an obligation to pay interest or had actually been kept out of his money by having had to make any interim payments to his solicitors as opposed to simply awarding interest on the bill as a whole?(ii) If the court did have such a power was it appropriate to exercise it to disallow interest in this case to reflect the fact that Mr Hanley had not been actually out of pocket since he had not paid costs to his lawyers but had been represented under a CFA?

Defendant’s position

[11]On the question whether the court did in principle have a discretion to order otherwise than that interest must run from date of the judgment order, Mr Cooper referred me to Powell v Herefordshire HA [2003] Costs LR185. On the facts in Powell the Master had held himself bound to allow interest from the date of judgment on liability with quantum to be assessed, and costs, (in 1994) rather than from the much later date (6 years later in 2001) when quantum issues were resolved and the final judgment was obtained. The Appeal Court held (between paras. 3 and 13 which I need not quote) that the costs judge in that case had not been ‘in a legal straightjacket’ (an expression used in para. 11 of judgment) requiring him to order interest from the original judgment date, because CPR 44.3(6)(g) to which the Master had not been referred provided that a court had the power to order that interest shall run from or until a certain date.[12]Mr Cooper stressed that the effect of Powell was that the court could therefore allow interest from a date after judgment if it was just to do so. That was he said the effect of the wording of s.17 of the 1838 Act as amended coupled with the text of rule 44.3(6)(g) and the interpretation of that rule by the Appeal Court in Powell. He accepted that the statutory interest rate of 8% had not been altered despite changes in Bank of England base rate.[13]I was referred also to CPR 40.8 which was to the effect that where interest is payable under s.17 of the 1838 Act, interest “shall begin to run from the date that judgment is given” unless a rule or practice direction made different provision or the court ordered otherwise, and that the court “may order that interest shall begin to run from a date before the date that judgment is given”.[14]It was therefore said that I could order that interest should start from a later date than judgment if the claimant had in fact been kept out of money only from a later date because or (if there was uncertainty as to actual date(s) of any interim payments) I could direct that an overall reduced rate should be allowed (AMEC Process & Energy Ltd v Stork Engineers & Contractors BV [2002] EWHCB1 (TCC) was mentioned in that regard). It was accepted that if the Claimant had actually made interim payments on account of fees to his own lawyers prior to judgment then he would be entitled to Judgments Act interest on those sums because he would be actually out of pocket.[15]However Mr Cooper argued that it would not be just to allow the claimant or his solicitors to recover interest for periods for which Mr Hanley was not actually out of pocket, and second that it would be unjust to allow the solicitors to recover interest when there was no contractual obligation on Mr Hanley to pay interest to his solicitors. (I was informed on making enquiries that in this case Mr Hanley had in fact made one or more substantial interim payments to his lawyers for disbursements which were paid from sums received by him from the MIB on account of his damages).[16]Mr Cooper indicated that under the terms of the CFA any proportion of the success fee relating to the costs to the legal representative of postponement of receipt of payment of his charges was not recoverable from the paying party. The CFA did provide that the solicitors were entitled to keep any interest which was awarded by the court but it was argued that there was no contractual obligation upon Mr Hanley in the first place to pay interest on the solicitors’ charges. He mentioned also that the definition of costs and charges in the CFA did not refer to interest. If there was no obligation to pay interest then that he said would be a windfall to the solicitors and would also be effectively compensation for postponing their charges.[17]Mr Cooper referred to Giles v Thompson [1994] 1 AC 142 indicating that interest on damages is generally regarded as compensatory and that when the courts have considered awarding penal interest under CPR Part 36 the case law is indicative of a compensatory approach such that no penal interest is awarded unless the client is has actually had to pay costs. I was also referred to Bim Kemi AB v Blackburn Chemicals Ltd [2003] EWCA Civ. 889 per Waller J that “In principle there seems no reason why the court should not [award interest] where a party has had to put up money paying its own solicitors and been out of the use of that money in the meanwhile”. In similar vein, Douglas v Hello! Ltd [2004] EWHC 63 (Ch.) was referred to (where Mr Douglas had actually paid invoices before judgment, and an interest rate of base rate plus a margin was allowed, with judgment rate thereafter from date of judgment) as was Fosse Motor Engineers Ltd v Conde Nast [2008] EWHC 2527 (TCC).

Claimant’s position

[18]Counsel for the Claimant at the outset clarified his client’s position namely that he claimed statutory interest under the Judgments Act 1838 at the statutory rate of 8% on his costs from date of approval of the settlement which was 14 April 2008. No interest before that was claimed on the basis that until approval, there was no effective settlement or judgment debt. Because there had been payments on account by the MIB, the outstanding costs were I was told of the order of £150,000 and it was only upon any outstanding costs which interest was claimed from date of approval of settlement, albeit that the Claimants position was that a court would have a discretion to allow interest before that date in an appropriate case.[19]The Claimant conceded that interest on costs for a 23 day period of delay in commencing detailed assessment should be disallowed but otherwise sought his interest from date of the approval of settlement.[20]The cases referred to by Mr Cooper were said not to be apt. They either related to penal part 36 interest or cases where substantial expenses had been actually paid by the client prior to judgment such as where loans had been raised to pay legal bills as the case went along. My attention was drawn to Bollito v Arriva London [2009] SCCO 2/2/09 which was a decision of Master Rogers, in which very similar arguments (and some of the same authorities) had been cited by Mr Cooper and rejected by the Master. I was taken to para. 49 of that judgment which quoted from Douglas v Hello! at para 24. (I have quoted that para. 24 later in this judgment). There was a distinction between interest on costs, in that judgment and judgment debt interest.[21]I was taken to the summary of Hunt v RM Douglas (Roofing) Ltd. [1988] 3 All ER 823 (HL) quoted from Butterworths Costs Service in Bollito at para. 56 and it was suggested that perhaps that judgment could have been the genesis of the standard CFA term to the effect that any interest recovered by the client could be kept by the solicitors.[22]It was stressed that the effect of Mr Cooper’s argument would be that where a person was not in the position of a privately paying client on a conventional basis but was represented under a CFA, the costs bill from date of judgment should not attract any interest merely because of the position of the claimant. The client’s entitlement to interest on costs under the Act was parasitic upon the right to be paid his costs by the other party, and was not a right which arose out of contractual rights within the CFA between the client and solicitor.[23]I was referred to 47.172 of Cook on Costs mentioning Eiles v Southwark LBC [2006] EWHC 2014 (TCC) where costs and interest on those costs were awarded on the basis of the date when work was done notwithstanding that no fees had actually been paid for that work because the client had been represented under a CFA (I was not referred to the full report). Mr Chawatama for the Claimant said that the idea that the client had to be out of pocket was not relevant.[24]Mr Chawatama stressed the apparently mandatory wording of the Act and the fact that there was a right to interest on costs unless the rules allowed the court to order otherwise. The rules permitted the court to alter the date from which interest should run but there was no qualification as to the basic primary right to interest – there was no requirement to show that the client was out of pocket. Parliament had decided that from date of judgment the party was prima facie entitled to interest on the judgment debt which included (as part of the debt) his costs awarded under the judgment. The extent to which the court could depart from that was by varying the period of the interest either to cause it to run from an earlier or later date where there was a just reason for doing so. CPR 40.8 merely set down the default position as to when interest began to run, subject to the power of the court to vary that date but did not provide a power to disallow all interest. (Mr Cooper drew the court’s attention to Rule 47.8 which was an example of a specific rule which enabled the court to disallow interest, where detailed assessment was commenced late and also to the related rule 47.14(5) where a late request for a hearing of detailed assessment was made). Mr Chawatama argued that those were specific narrow rules limited to their particular context and effectively highlighted the absence of specific rules permitting the disallowance of Judgments Act interest in other situations.

Defendant’s response regarding Bollito

[25]Mr Cooper informed me that in relation to the Bollito case relied upon by the Claimant he had appeared in that case before Master Rogers as advocate in arguing the points raised there as to interest on costs. He told me he had informed Master Rogers that he was already part heard before me in this case just in case the Master had taken the view that it would be better to adjourn the question, but the Master had taken the view that there was no reason to think that his decision in the case before him would affect my decision in this case. Mr Cooper stressed that in Bollito there had been no disclosure of the terms of the CFA whereas there had been disclosure in this case (so that Mr Cooper was now in a position to argue issues of contractual liability to pay interest which had been rather hypothetical before Master Rogers). I was taken to paragraphs 59 to 64 of Master Rogers’ decision which I will not quote in this judgment but which are relevant because Mr Cooper’s arguments in Bollito were similar to those before me. There were some factual differences (in Bollito for example the costs were those relating to liability only) but I do not regard those as sufficient to make Bollito in any sense less relevant.

My judgment on issue 1

[26]s.17 of the Judgments Act 1838 as amended states: “(1) Every judgment debt shall carry interest at the rate of 8% per annum from such time as it shall be prescribed by rules of court until the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment. (2) Rules of court may provide for the court to disallow all or part of any interest otherwise payable under sub-section (1).[27]Rule 44.3(6)(g) provides insofar as relevant that one of the orders as to costs which a court may make is an order that a party pay “(g) interest on costs from or until a certain date, including a date before judgment”. I have also referred above to rule 40.8.[28]Following the appeal judgment in Powell v Hereford HA (supra.) and the decision there that a judge is not straitjacketed and may direct otherwise than that interest must run from date of judgment, and given the words of CPR 44.3(6)(g) and 40.8, the court does in my judgment have a power to alter the start date from which interest runs in relation to costs. That power extends in principle to ordering interest to commence from a date before judgment or from a date after judgment. There is however little case law on when it may be appropriate to exercise that discretion so as to direct that interest shall run from a date after the date of judgment. The fact that rule 44.3(6)(g) also provides a power to direct that interest on costs shall be allowed “until” a particular date to my mind implies that if the court so decided there would in principle be something approximating a power to disallow interest by setting appropriate ‘from’ and ‘until’ dates albeit that there is no specific reference to “disallowing” interest in that rule. Rule 44.3(4) requires the court to have regard to all the circumstances of the case when considering what orders to make as to costs.[29]Nonetheless even given that discretionary power, it seems to me that the wording of s.17 of the 1838 Act itself is indicative of a clear statutory starting point that there is a right to interest from date of judgment and that the right is not stated to be qualified in any way by considerations of whether there is a contractual liability to pay interest to his lawyers or whether the claimant has been kept out of pocket in the past (as long has he has in fact incurred the costs in question). It is in essence a right to interest which arises because as from date of judgment the party in question is thereafter being kept out of the money to which he has become entitled as a judgment debt on the date of the order. It runs (unless ordered otherwise) prospectively from date of judgment until payment. The source of the entitlement to be paid interest post judgment stems from the judgment and from the Act and not from the contract between the solicitors and the client.[30]I note that the interest rate under s.17 is set by Parliament at 8% and does not depend upon any liability upon a client to pay his lawyers that interest rate upon fees and nor does it depend upon the client having actually incurred an out of pocket loss of interest at 8%. It sets a uniform post-judgment interest rate which was presumably thought by Parliament to be appropriate in general.[31]In relation to AMEC Process & Energy Ltd referred to by Mr Cooper, that case is an example where a court exercised its power to award interest from a date before judgment, and the court’s application of CPR 44.3(6)(g) on the facts of that case was that the receiving party (which had paid substantial costs to its lawyers a significant time before judgment in the course of he litigation) was discretionarily awarded interest at 6% prior to judgment to compensate it for actual costs paid before judgment. That rate stopped on date of judgment when the Judgments Act interest began to run in its place. The basis for the decision was an application of a decision of Langley J in Amoco (UK) Exploration Co. v British American Offshore Ltd (unrep.) 22/11/01 (quoted at para. 116 of AMEC) where Langley J stated:
“10. For my part, I think it may well be appropriate, at least in substantial proceedings involving commercial interests of significant interest both in balance sheet and reputational terms, that the court should award interest on costs under the rule where substantial sums have inevitably been expended perhaps a year or more before an award of costs is made and interest begins to run on it under the general rule… I have no difficulty in accepting that costs of such an order [£16m] have had to be financed and paid over a substantial period of time… I would consider it appropriate in principle to award interest upon such costs from payment to judgment.”
[32]I accept that AMEC was not a part 36 penalty interest rate case, which was a factor Mr Cooper relied on in view of the rejection of his previous argument before Master Rogers who had distinguished Mr Cooper’s various authorities on the footing that they had related to penalty interest under Part 36. However I do not see anything in AMEC which binds me in this case to hold that I should depart from what (in Amoco) was referred to as the “general rule” as to interest running on costs from date of judgment. The key point in Amoco and in AMEC was that particularly onerous costs had actually been paid for some time prior to the judgment in cases where significant commercial interests and values were involved. The court in those circumstances thought it just to allow interest prior to judgment. Those cases do not assist me in the very different circumstances of this case.[33]Similarly in relation to the cases of Bim Kemi, Douglas v Hello! and Fosse Motor Engineers (supra.) all cited by the Second Defendant, those cases do not compel me to the conclusion that in a CFA personal injury case such as this I should effectively disallow interest to the extent to which the claimant was not actually out of pocket. In Bim Kemi the case concerned (insofar as relevant) interest on costs prior to judgment where the party had paid money in funding the litigation. The decision primarily concerned the court’s discretion to allow interest prior to judgment (as was the case in Amoco and AMEC already referred to). The Defendant was awarded 1% over base rate upon its costs prior to judgment, applying a compensatory principle for that period, with judgment interest running under the Act from date of judgment onwards.[34]Likewise in Douglas v Hello!, applying Bim Kemi, the court on essentially compensatory principles awarded interest from a date before judgment where the party in question had actually paid legal fees before judgment. It seems to me significant that in Douglas v Hello! the court impliedly approached matters by awarding what amounted to compensatory interest (at base rate plus 1.5%) from date of payment of solicitors’ invoices until judgment. The court approached matters on the footing that the date of judgment marked the stopping point of what I will describe as the compensatory interest, per Lindsay J at para. 24 who treated ‘interest on costs’ differently from ‘judgment interest’ in the following passage: “In Bim Kemi … Waller LJ said at p.44(c) of an award of interest on costs- ‘In any event in principle there seems no reason why the Court should not do so where a party has had to put up money paying its solicitors and been out of the use of that money in the meanwhile’. In Bim it was ordered that the award of interest should run as from the dates of solicitors’ invoices but, in principle, it seems to me that the more appropriate dates, when one is seeking to measure the extent to which a party has been out of pocket, would be the dates on which invoices were actually paid. As to when such interest should stop, it seems to me that the appropriate time would be when interest on costs is replaced by judgment interest.” ‘In any event in principle there seems no reason why the Court should not do so where a party has had to put up money paying its solicitors and been out of the use of that money in the meanwhile’.[35]In Fosse Motor Engineers also cited to me the issue was, again, what rate, if any of interest on costs should be allowed for the period before judgment. Applying a compensatory approach the court awarded (following Bim Kemi) interest at base rate plus 1% on costs paid before judgment by the insurers. The court did observe (at para. 12 in Fosse Motor Engineers) that per Akenhead J. “… the principle of the award of interest on costs is primarily compensatory, to compensate a party in whose favour an order of costs is made against the burden of having had to pay costs as the case has run along”, but in the context of the issues in that case in my judgment it is clear that the principle being referred to relates to situations where substantial costs have been incurred and paid before judgment such that a compensatory interest award of interest on costs is appropriate preceding the basic Judgments Act statutory entitlement to interest on the eventual judgment debt.[36]I do not therefore interpret the above and the other cases cited to me by Mr Cooper (whether they be part 36 penalty interest cases or otherwise) as establishing that where a party has had the benefit of a CFA and may not have been out of pocket during the litigation (or at least not wholly out of pocket), it follows that the court should disallow Judgments Act interest after the date of judgment on that part of the judgment debt which relates to his costs. I accept that if particular circumstances render it unjust to allow interest for the whole period post-judgment then the court does have the power to adjust the start date or the end date. But I do not accept that the mere fact that a party has operated under a CFA rather than being self-funded, or that he has not necessarily made interim payments on account of all of his lawyer’s fees, justifies such a departure from the general principle mentioned in Amoco and applied in AMEC.[37]I also respectfully concur with Master Rogers’ observation in Bollito that a far-reaching decision of the type sought by Mr Cooper both before me and on very similar arguments before him, which would depart from the long established approach and would affect many cases, is not one which should be taken at Costs Judge level (unless of course the law or the rules necessarily require such a conclusion on the facts of this case, which I am satisfied they do not). Moreover whilst not technically binding on me (because the decision in Bollito was made at the same level as this decision), the reasoned decision of a costs judge of the utmost experience such as Master Rogers deserves appropriate respect, and in any event I agree with it.[38]I therefore conclude in the Claimant’s favour on the interest point and will not depart from the usual order that interest runs on the judgment debt as to costs at Judgments Act rate from the date of the final approved order less the conceded period of 23 days disallowed for late commencement of assessment. (2). Level of success fees

Defendant’s position

[39]Mr Cooper at the outset accepted that in view of the assumption by all representatives of the Part 36 risk along with the other risks, he could not sustain his position as to leading counsel’s success fee which had been a proposal of 5% on his part. Having clarified that leading counsel was, as for the other representatives, subject to the part 36 risk in this case he argued that success fees for all the representatives should be of the order of 20%.[40]The principles under CPR 43.2 and CPD 11.7 were not in dispute namely that the court should take into account the facts and circumstances of the case as they reasonably appeared to the representative at the time of entering into the agreement or any variation. He also referred CPD 11.8. His case focussed very much on the factual circumstances appertaining at the times of the CFA’s in the case but he did raise one contractual point in relation to the definition of ‘win’.

Solicitor’s CFA of 6 March 2006

[41]Mr Cooper referred to the solicitor’s CFA terms and risk assessment. The terms specified a success fee of 100% of which 90% was recoverable from the opponent and represented the risk-based success fee and 10% represented irrecoverable cost of postponement of charges. Referring to the definition of ‘win’ this was the standard expression “your claim for damages is finally decided in your favour whether by a court decision or an agreement to pay your damages or in any way that you derive benefit from pursuing the claim”. “Finally” meant ‘your opponent is not allowed to appeal against the court decision or has not appealed in time or has lost any appeal’.[42]The risk assessment was dated 1/3/2006 and the CFA was dated 6/3/2006. He submitted that it was important that this was a claim against the driver as well as the MIB and the claimant had on 23/9/05 secured a judgment for damages to be assessed the against the driver at the time the solicitor’s CFA was entered into, and in that sense had secured a ‘win’ already at that stage. Whether or not the driver could pay was a different matter (and I interpose to add that it was fairly obvious he could not pay). The definition of ‘win’ he said arguably had been triggered. There had been a decision of the court for payment of damages by the first defendant. The definition did not require damages actually to be paid. In the absence of other wording in the CFA to clarify the trigger point for a ‘win’ or whether the decision triggering a win had to be one as against one or both defendants, there had arguably been a win by the time of the solicitor’s CFA.[43]Mr Cooper accepted that because MIB liability as second defendant could only be possible in principle once liability had been established against the first defendant there were no circumstances in which one could obtain a “win” against the second defendant without having obtained a “win” against the driver. The MIB liability was contingent on a judgment against the first defendant (subject to issues such as eligibility which might afford the MIB a defence). The only results which could in reality arise for the Claimant would be judgment against the first defendant alone or judgment against both defendants.[44]That was he said important in the context of the risk assessment form for the solicitors. There had already on a contractual basis been a ‘win’ by the date of the CFA. There had been a Defendant’s part 36 offer on 10/2/06 as to apportionment of liability on a 2/3rds vs 1/3rds basis which had expired prior to the date of the solicitor’s CFA. On 17/2/06 the Claimant had put forward a Part 36 offer of apportionment of liability on a 75% vs 25% basis which was dated so as to expire on or about 13 March 2006 (in other words the Claimant’s offer was ‘live’ when the CFA was entered into). The Claimant I was told had been informed on 1 March 2006 that instructions were being sought.[45]The point Mr Cooper relied on was that the solicitors were aware when they entered into the CFA that there was a willingness on the part of the MIB at least to consider the 75% vs 25% proposed division of liability. Yet rather than wait until their Part 36 offer expired they entered into the CFA. Moreover at the time of the CFA the solicitors (notwithstanding what Mr Cooper called the ‘official line’) had had a clear indication that there was at a potential for the matter being resolved at somewhere between the Defendant’s lapsed offer and the Claimant’s live 75% vs 25% offer. Ultimately agreement was reached as to a 70% vs 30% split of liability not long after the date of the CFA.[46]It was accordingly suggested that the prospects of recovering as against the MIB were extremely good at the date the CFA was entered into. Mr Cooper mentioned that there had been an interim payment already made by the MIB prior to the CFA date and that that signalled an acceptance that some damages had to be paid (however it was pointed out to me that the payment which had been made had been strictly without prejudice and in effect appeared to be an ex gratia payment).[47]Against that background Mr Cooper took me to the solicitor’s risk assessment form. The essence of Mr Cooper’s main argument leaving out of account specific points about specific factors at this point, was that certain factors had effectively been counted twice as a result of the process adopted such that risk had been overstated, or that risks were generally overstated.[48]On page 1 of the risk assessment there were details of the accident etc and the client, and the circumstances of the case (this was a pillion passenger, driver liability admitted). On the next page there was under a heading “D” a reference to absence of driver’s insurance but no reference to other risk assessments. Under heading “E” there was further mention of the fact that negligence liability had been admitted and that an early part 36 offer was likely (in fact there had already been an expired Defendant’s offer and the Claimant had had made one of his own which was ‘live’). There were references to potential issues of causation of loss (in the context of prior drug use and medical history). There were no issues as to limitation (he was a patient). In relation to quantum there was he said nothing to indicate exaggeration risks. On the third page, this was estimated to be a 2.5 year case (relevant to the calculation of the postponement percentage).[49]Part 2 of the form began with a “risk assessment calculator” which expressed risk as “level of risk x likelihood of occurrence = total”. Below that appeared a table of various factors with columns for “level of risk” ( R)(0-3) and “likelihood of risk” (L) (0-3). The calculation proceeded by multiplying R x L for each factor and adding up all factors to reach a total which in this instance came to 36.[50]Mr Cooper pointed out in particular some factors such as such “as ability to describe the case” (Mr Hanley lacked capacity and this was a high risk factor), and “difficult insurer” as examples in the list (Mr Cooper said that taking into account whether an opponent was difficult was not a reasonable risk factor). Evidential aspects were broadly allocated a medium level of risk, as was the client’s likely impression on the judge. There was stated to be a high risk arising from Part 36 offers (the Defendant’s part 36 offer proposing 2/3rds vs 1/3rd had already expired as at the date of the CFA). There was a stated high risk arising from the Defendant’s prior medical history.[51]The total of the R x L figures in Part 2 of the form came to 36 points. There was a scale of risk following the table such that, for example a score of 0-15 would be called “low risk”, a score of 41 upwards would be “very high/unacceptable risk” and (as in this case, a score between 28 and 40 was labelled as “high risk”.[52]It was when one reached Part 3 of the form that scope for confusion and double counting arose, on Mr Cooper’s submissions. Part 3 began with a copy of the ‘ready reckoner’ success fee calculator. Beside the ready reckoner in handwriting appeared a sentence stating “non-standard success fee due to value and eligibility and causation and Sowden argument”. The solicitor had selected a 75% prospect of success which implied a success fee of 34% .[53]Following that table there was a further table which specified various risk factors and stated that the percentage for each should be deducted from the figure for the prospects of success in the table above it (75%). There were three deductions namely 5% because the client’s recall of facts was poor (as it undoubtedly was: he was not competent to give evidence), 10% for risks arising due to passage of time since the accident, and 25% for risks arising from causation of loss. Deducting those percentages from the 75% prospects of success left an effective prospect of success of just 35% implying a maximum success fee of 100%.[54]Over the page a further 15% was (notionally) added to the success fee as a result of the Part 36 risks. In view of the fact that the risk assessment had already pointed to a 100% success fee these further notional additions made no difference and success fee was necessarily capped at the maximum allowable namely 100% of which 10% was cost of postponement.[55]Mr Cooper argued that the methodology adopted was flawed. The factors in Part 3 which had been used as deductions from the success fee had surely already been taken into account as part of the very long list of factors which had been listed and considered in Parts 1 and 2 of the form which had led to the assessment of the case as ‘high risk’ in the first place. There was in that sense double counting which lowered the prospects of success. A specific example of double counting was that the client’s memory and recall had on that basis been taken into account twice. Having used the risk scores in Part 2 to reach the prospects of success they then deducted from that prospect of success the risk factors in Part 3 which had already been considered when initially coming to the 75% prospect of success in the first place.[56]Accordingly he argued that all three factors in the table in Part 3 had been taken into account already. Those were factors relating to the client’s recall, causation and a 10% figure which related to the number of years since the accident and he said appeared to be in effect postponement of charges. The risk had accordingly been overstated by 40% so as to reach the 35% over all prospect of success (even before deducting Part 36 risks, which as Mr Cooper mentioned had also been a factor appearing in Part 2 of the form).[57]The maximum success fee he argued was therefore 34% which was the figure based on a 75% prospect of success, and not the much higher figure which double counted the Part 36 risk and the three other factors which I have just mentioned. Mr Cooper argued that on the Claimant’s own assessment the maximum success fee looking at the risk assessment was the 34% set out at the start of Part 3 of the form but on his case a 20% success fee should apply because there had already been the liability order against the first defendant.

Junior Counsel’s CFA of 1 March 2006

[58]Junior counsel estimated prospects of success at 67% leading to a 50% success fee but had entered into a two stage agreement whereby success fee would rise to 100% in the event of the brief being delivered. The ultimate success fee claimed was therefore limited to 50%.[59]The arguments put forward by Mr Cooper effectively re-iterated those relied on in respect of the solicitor’s CFA (and the dates of the CFA’s were similar). Counsel had been more optimistic in his assessment of prospects of success than the solicitors.

Leading counsel’s CFA of 10 October 2007

[60]Liability had already been agreed at 70%, issues of eligibility had been resolved as at the date of Leading counsel’s CFA. There was already judgment against the first defendant. Only quantum issues remained live. Mr Martin QC had assessed prospects of success at a ’cautious’ 55% which led to a success fee of 82%.[61]Mr Cooper reiterated the contractual point as to whether there had already been a ‘win’ which on his case applied equally here. In his submission a prospect of success of 55% was too low and that 75% upwards would have been appropriate at that stage of the case in October 2007. He accordingly proposed between 20-30% as a success fee representing 75%-85% prospects of success.[62]Mr Cooper argued that the 70% apportionment of liability which had been agreed as at date of leading counsel’s CFA meant that that issue was resolved and the Part 36 risk had been reduced. Leading Counsel was only dealing with quantum and his fees were at risk only as a result of any Part 36 offers as to quantum and other live sub-issues. However Mr Cooper did accept that the very fact that there had been a 70% liability settlement was in itself a new matter which had arisen since the solicitor’s and junior’s CFA’s.[63]Mr Cooper prayed in aid C v W [2008] EWCA Civ 1549. In that case the CFA provided a 98% uplift and included provision that the client did not have to pay any percentage uplift or basic costs after date of receipt of notice of the offer if she had been advised to reject an offer but later failed to beat it. The solicitors had therefore assumed that level of Part 36 risk. The sole Defendant had already admitted liability at the date of the CFA so that the main risks were Part 36 risks. The effect of that admission was that the claimant would inevitably recover substantial damages because the Defendant had been insured.[64]Mr Cooper argued that the Court of Appeal had considered that a success fee of 20% was appropriate in cases such as that. Mr Cooper pointed out by analogy that in this case by the time Mr Martin QC ‘came on board’ the only live issue was quantum and that C v W would suggest a 20% success fee as proposed by Mr Cooper in this case.

Claimant’s position and evidence

[65]It was clear from Mr Cooper’s submissions that the solicitor’s risk assessment form was a cause of considerable lack of clarity and that could only be answered by way of evidence from the solicitor Ms Reynolds who was in attendance. She gave evidence on an unsworn basis and answered questions about the manner in which the form had been used.[66]Her evidence was that the form was divided in effect into two functional parts which were wholly separate. A lack of clarity in the design of the form had led to the issues in this instance. It was a form which I was told was no longer in use. Her explanation which I accept was that the first “risk assessment” which appeared Parts 1 to 2 of the form was unrelated to the success fee but was her own firm’s method for categorising the case with a view to making a decision whether it was a case the firm would be able to take on. Hence if the various factors added up to a “R x L” figure totalling 41 or more then the case was of very high risk and essentially unacceptable to the firm. Her evidence was that if the case had fallen into that category the firm would not have proceeded to consider a CFA. Matters would have stopped at Part 2 of the form.[67]Having passed that vetting process, in effect, Part 3 of the form was the totality of the risk assessment for the CFA success fee, and matters started afresh. The first step was that a basic prospect of success was allocated based on the broad type of case. There were standard levels for typical cases such as routine RTA (85%) as a guide, but the solicitor had allocated 75% as the basic prospect of success because this was (as she had written on the form) a “non-standard success fee” arising due to “value and eligibility issues and causation and Sowden argument”. (The reference to the “Sowden” argument was a reference to risks arising from the outstanding issues over long term State care provision). Having taken those factors in particular into account she had set a basic prospect of success of 75%. Thereafter further specific risk factors had been deducted which were the three matters in the table below the ready reckoner (amounting to a 40% deduction from prospects of success) and a further 15% added to the success fee arising from the Part 36 risks.[68]It did appear from what she said that the specific risk factor arising from causation issues, to which she had allocated 25%, had already been taken into account when setting the 75% prospect of success at the start of Part 3 of the form (where “causation” was mentioned alongside others making this a non-standard case). However she was clear that the assessment process which had been undertaken in Part 2 of the form was a wholly separate matter from Part 3 an did not reflect a general double counting in the manner which Mr Cooper had argued had taken place.[69]Mr Chawatama stressed the role of the eligibility dispute in the assessment of risk as far as solicitors and junior counsel were concerned and that the MIB was effectively de-emphasising that in its submissions. It was important to go through the risk assessments. As at 6/3/06 there was no live offer from the Defendants on the table and their previous offer had actually been rejected. There was no indication that the Claimant’s offer was likely to be accepted. There was to be an ‘all or nothing’ eligibility trial in about 2 weeks time as at the date of the solicitor’s CFA and I was invited to take that into account as to risk. It was not a side-skirmish but could have brought the whole case to an end if the issue had been lost. Eligibility was ‘all or nothing’.[70]He reminded me that credibility and reliability were issues: Mr Hanley’s circle of friends were knowledgeable of his habits and I was told that the Defendant had pointed out that Mr Hanley had Mr Smith’s mobile phone number suggested that there was a close relationship between him and Mr Smith such that he would have known of the uninsured status of Mr Smith, and Mr Smith’s evidence disclosed in a statement by the MIB was that it was ‘common knowledge and a standing joke’ that he did not have a driving licence and was not insured and that he was sure Mr Hanley (who he said had known him for 15 years) knew about his lack of insurance. There (Mr Smith had been prosecuted for driving without insurance).[71]In contractual terms this case concerned a protected party incapable of giving instructions. Considering the definition of “win” one had to bear in mind that a final decision in the case could only be by way of a court decision to approve a settlement (or a decision at trial) in this case. An unapproved settlement would not be sufficient to be a final decision of the claim to trigger a ‘win’. The first defendant had no means of any sort and was uninsured. The only possible benefit which the Claimant could get by establishing liability against him was that he could then trigger the contingent liability of the MIB to pay (subject to eligibility being established). Mr Cooper was he said, wrong to suggest that the mere obtaining of judgment against the first Defendant amounted to a win.[72]In terms of Leading counsel’s fees Mr Chawatama’s skeleton urged on me that even if I was against the claimant based on the risk assessment, the level of reduction proposed by the Defendants was not appropriate. In general (following C v W) the court should not disturb a success fee which was within a reasonable bracket.[73]The Part 36 risks in this case applied to both counsel and to the solicitors went beyond mere risks arising from simple cross-offers of sums of money. The parties on each side could legitimately have reached very different conclusions as to what a judge might award. The outcome would be dependent on the very uncertain matter of whether a judge would find that Mr Hanley would remain in State care permanently. The Claimant’s case was always that care in the community was what he would need. Care in the community placed the valuation around £3m. The Defendant’s case by contrast had been was based on state funded care the value of which was of the order of £700,000. The parties were not running ‘like for like’ cases and their positions had depended centrally on uncertain findings which a court might or might not make and the parties were not therefore acting on the basis of common, known, facts. The Part 36 risks were very substantial. That was why leading counsel had been brought in. The complexity and risk were heightened further by the additional factor that Mr Hanley was sectioned under s.3 of the Mental Health Act 1983 and might never be released so as to need damages for his care (that was a distinct point from the issue of State funding of care).

(i) The methodology of the solicitor’s risk assessment forms

[74]Mr Cooper’s points based on the unclear and confusing nature of the solicitor’s risk assessment form were perfectly proper ones to make based on the documents and the arguments which arose and the time taken on that aspect were largely caused by deficiencies in the solicitors (then) form. However having ultimately heard the conducting solicitor I am satisfied that the form did indeed in fact represent two separate processes namely the internal ‘vetting’ or allocation of the case in risk terms (Part 2) and quite separately the risk assessment for the purposes of the CFA (Part 3). Other than the 25% factor which was taken into account for the causation risk, which does appear to have been mentioned twice in Part 3, this is not a case of general double counting of the risk factors. If one re-works the calculations in the risk form leaving out of account that 25% factor that leads to a prospect of success which (on the solicitor’s own methodology) would have been assessed at 60%. That would predict a success fee of 67% to which 15% would then have been added in respect of remaining Part 36 risk making an 82% success fee (which would be equivalent, working back via the ready reckoner, to a 55% prospect of success.) (ii). whether there had been a “win” prior to the date of the CFA’s[75]On the issue as to whether on the construction of the CFA agreements there had been a “win” prior to entry into the solicitor’s (and indeed counsels’) CFA’s in my judgment one has to consider the facts and circumstances which would have been known to the reasonable person at the time the contract was entered into. The purpose of the CFA funding and indeed of the litigation was to secure damages for Mr Handley by way of compensation for his very grave injuries. The driver was plainly not a man capable of paying those damages and he was uninsured. In my judgment a reasonable person in possession of the relevant facts at the time the CFA’s were entered into would have understood that the central purpose of the litigation would not be satisfied merely by obtaining a worthless (but necessary) judgment against the driver. In my judgment “win” properly understood would in this context necessarily mean the final disposal of the case in the claimant’s favour as against both defendants. Only by succeeding against both and obtaining an order finally disposing of the claim could the fundamental objective of the litigation be achieved. I therefore do not accept that this case had been “won” merely because the issues of liability against the driver had been resolved by the date of the CFA at a time when there was every chance that the MIB could defend the case on the eligibility point.[76]I also accept the separate point made by Mr Chawatama that in view of Mr Hanley’s status as a Patient, the case could not be finally determined in his favour in any case until any settlement had been approved by the court. Whilst I do not think the risks of refusal of approval should weigh into the risk assessment, the basic point is a good one. That point also applies as much to the CFA used by the solicitors as it does by both counsel whose CFA’s adopted the definition of ‘win’ used in the solicitor’s CFA. (iii). General risk factors and assessment of success fees[77]As at the date of the solicitor’s and junior counsel’s CFA’s the eligibility issue (that is, eligibility for MIB cover) was still live. That was an ‘all or nothing’ issue which would have led to effectively no damages recovery for Mr Hanley if it had been decided against him. The eligibility issue was whether Mr Hanley had known that the driver was uninsured and had allowed himself to be carried on an uninsured vehicle. Mr Hanley lacked capacity and could not give evidence of what he knew, and had no memory. In that context eligibility was a very significant risk because, if the MIB had been so minded, it might very well have established (at the then imminent preliminary issue hearing on eligibility) that Mr Hanley had known he was being carried by an uninsured driver, given what I had been told about his previous close association with Mr Smith the driver, and the contents of the statement served by the Defendants in which Mr Smith gave evidence adverse to Mr Hanley on the knowledge point.[78]The Part 36 risk in this case was also in my judgment a significant one. Looking in particular at the time at which the solicitor’s CFA was entered into, there had already been a 2/3rds vs 1/3rd offer from the Second Defendant which had not bee accepted and so as at the date of entry into the solicitor’s (and junior counsel’s) CFA there was risk exposure arising from that.[79]I have mentioned the eligibility issue and the Part 36 risk in relation to the percentage apportionment of liability but it should not be overlooked that the actual quantum (and the basis for working out quantum) of the case was in itself a source of risk quite apart from percentage apportionment of any liability.[80]There were wide differences between the parties as to the extent to which if ever Mr Hanley could be released from his Mental health ‘section’ and issues as to the impact of any possible future State-funded care in the community (including complex questions of how a court would factor such prospective care into a damages award). Thus even if one can say that the existence of part 36 offers as to percentage division of liability showed that settlement of that issue might be ‘on the horizon’, the actual quantum involved was a significant area of uncertainty.[81]The 20% success fee proposed by the Defendant under-represents the risk to a significant extent given the facts of this case. However there has been overstatement in the solicitor’s risk assessment of the risk arising from the causation argument which was on the face of it considered twice. I do also take into account also that some risks had reduced by the date of the solicitor’s and junior counsel’s CFA (there had been admission of liability by D1 after a considerable struggle), and there was at least evidence of a willingness to negotiate (albeit tempered by the fact that one Part 36 offer had not been accepted). However bearing in mind the other matters to which I have referred and the acceptance of Part 36 risks in the representatives CFA’s, my decision is that the only appropriate adjustment to the solicitor’s success fee is that it should be reduced to 82% to represent an effective prospect of success (including beating any Part 36 offer) of 55%.[82]I accordingly assess the appropriate success fee payable by the paying party in this case in respect of solicitor’s fees at 82% (I have not added to that figure any element of costs of postponement which are not recoverable from the paying party).[83]Turning to junior counsel Mr Booth’s success fee, he acted under a CFA with a two stage success fee being 50% at the outset rising to 100%. The trigger point for the second stage was delivery of the trial brief, which was never delivered, and hence the percentage claimed is 50%. The risk factors outlined above applied, and the solicitors and junior counsel’s CFA’s were entered into at similar dates (solicitor 6/3/06, junior counsel 1/3/06) such that the relevant facts were much the same for both.[84]I note that junior counsel placed weight in particular, in his risk assessment, on the eligibility issue connected with the fact that the Claimant was a drug user with a criminal record whose social circle included the driver (which is a matter relevant to the likelihood that he knew the driver was uninsured and was an ‘all or nothing’ factor). Junior counsel took the view that negotiations had taken place but that it seemed there would be no further movement. The next steps in the case mentioned in the junior’s risk assessment were stated as “prepare bundle for trial of preliminary issue” and it is clear that he regarded the eligibility issue as significant.[85]Taking into account the various facts of the case to which I have referred and which were known at the date of this CFA, and the matters mentioned in the risk assessment, a success fee of 50% (on a two stage basis rising to a possible 100% which never arose) was entirely reasonable.

Leading counsel’s success fee

[86]It is clear that the key risk which was operative when leading counsel entered into his CFA was solely the Part 36 risk. Liability had by that time been established such that the MIB would pay 70% of the Defendant’s loss. The real risk therefore was that Mr Martin QC (who had assumed Part 36 risks) would lose all or some of his fees as a result of a well judged Part 36 offer as to quantum. The earlier the offer the greater the risk that he would lose all his fees. His success fee was 82% based on his assessment of prospects of success of 55%.[87]I accept that there are similarities between this case and C v W in that liability had been established at date of the CFA such that the main operative risk was that under Part 36. The Court of Appeal in C v W stressed (per Moore-Bick LJ at para. 8 that what is required is a reasonable and rational assessment of the risks at the time the CFA is entered into, those risks being the risks that the solicitors (or, here, counsel) will not be paid for his work as a result of failing to become entitled to his fee and success fee under the CFA.[88]In C v W the solicitors based their 98% success fee upon an initial basic assessment of risk (25%) that no damages would be recovered (such as risk the client would not accept advice, and the general risks of litigation) and to that they added additional percentages for other factors such as possible contributory negligence.[89]The Court of Appeal held that it was difficult to see how Mrs C could fail to recover substantial damages given the pre-existing admission of liability, yet the risk assessment had started out with a basic percentage based on a notion of risk that the case would be lost outright. The Claimant’s solicitors had adopted a misguided approach to assessing risk. The basic assessment had been that there was a 25% chance of no damages at all being recovered. In the court’s judgment that was badly wrong. The chance of actually losing the case altogether in the face of the admission of liability was no more than 5%.[90]The Court of Appeal then considered the difficult question of what success fee might be appropriate given the Part 36 risks which the lawyers had adopted. On the particular facts of C v W (where the CFA was entered into prior to issue of the claim but after admission of liability) that required consideration of what chance there was that a Part 36 offer would be made by the Defendant, the chance there would be that it would be made at an early stage (exposing the solicitors to greater risk), the chance that they would advise rejection, the chance she would accept their advice and the chance that at the end of the case the offer would not be beaten. In C v W it was observed that one could confidently predict that an offer would be made and (with less confidence) that the client would reject it if advised to do so. The risks as to when an offer might be made and as to whether it would ultimately not be beaten were harder to assess. At para. 17 the Court of Appeal stated per Moore-Bick LJ “…one would not expect highly experienced solicitors practising in this field to differ very widely in their assessment of the bracket in which an award would be likely to fall, provided they had access to the same information. That would include access to any evidence of contributory negligence ….the task facing Taylor Vintners in May 2001 was to assess, as best they could, the risk of losing part of their fees likely to be earned for reasons of that kind, and then expressing that as a percentage of the total fees likely to be earned at trial. …. The explanation form shows that they did not attempt to grapple with that task…”[91]In C v W on the facts of that case 20% was said to be an appropriate success fee (equivalent to a 17% prospect of not recovering any fees).[92]Each case must be decided on its own facts but C v W does provide authority to guide this court on the approach where liability has been established at the time when a CFA is entered into. One aspect is that the costs judge would not generally be expected to interfere with a success fee selected by the solicitor if it was within a bracket of reasonableness. In this case it seems to me that the following matters of relevance stand out when it comes to assessing the risk of not recovering fees on the facts:(i) I accept that in this case which was at an advanced stage there was a high chance that a Part 36 offer would be made as to quantum at an early stage after the QC was instructed. This was a case where the MIB were not only experienced opponents but had every reason to seek to protect themselves in costs in view of the likely high level of expense in the assessment of quantum in this case.(ii) There would have been a high likelihood that advice to reject an offer would be accepted. That arises because if the lawyers were not prepared to advise acceptance it would be unlikely that any proposed settlement would have been approved by the court which would have the benefit of advice on settlement in the case of a Patient.(iii) This case departs widely from the facts of C v W. It is significant that in C v W the quantum issues were regarded by the Court as being such that experienced practitioners would have been unlikely to disagree as to the range of suitable offers assuming that each side had the same information. By contrast in the case before me I consider that there was a wide degree of uncertainty as to what range of quantum could be appropriate, as at the time of leading counsel’s CFA. In particular: (a) Life expectancy was significantly disputed (and from life expectancy the quantum calculation substantially flows). (b) there was uncertainty as to what was the appropriate approach to factoring in the value of future state care into any quantum decision, given the complexities of projecting that element forward for the future by reflecting it in the multiplier and multiplicand. As result of the 70% liability settlement it had (at the date of leading counsel’s CFA) become certain that the risk-bearing task of factoring in that future State care would have to be undertaken and this factor had become of greater significance than it had been prior to that settlement. ( c) there was a real uncertainty as to whether Mr Hanley would ever actually be released from Mental Health Act section so as to require any care funding in any event (whether provided by the Local Authority, NHS or otherwise). If he was never likely to be released then his quantum would be very greatly reduced.[93]It is a difficult task to assign risk levels to such factors as the above but in my judgment they take the risks in this case outside C v W (and C v W does not in any sense prescribe rates for success fees but simply stresses the need for a careful and rational approach exemplified by the judgment in that case). In this case, but not in C v W, it was entirely possible that experienced professionals on both sides would adopt reasoned positions as to quantum which were widely differing as to both value and underlying principles (and indeed both sides did adopt very different positions). This is not a case where there would be anywhere near as great a chance of a meeting of minds in offer terms as there would have been in C v W even between experienced professionals.[94]I do take into account however that by the date of Leading Counsel’s CFA the risks no longer included the ‘nightmare’ prospect of losing on eligibility, which had been settled by the date of Mr Martin QC’s CFA and that it was clear that substantial damages would be recovered so that this case would ultimately have resolved into to a matter of judgment as to Part 36 offers. I must also I think bear in mind that even though there was a wide possible range of disagreement as to quantum of offers, experienced practitioners would still be able to judge whether an offer was within the range of possible decisions a court might make, albeit with a much wider margin of uncertainty than in a case such as C v W.[95]The prospects of the Part 36 risk materialising had increased once the 70% liability settlement had been reached for the reasons I have explained in relation to State care funding (which had become necessary to cover the remaining 30% and therefore required to be considered on quantum issues rather than merely being a possibility). However set against that is the reduction in other risks principally because the eligibility issue had resolved.[96]In my judgment the risks in this case at the date when Leading counsel entered into this CFA had, overall, declined relative to date of the solicitor’s risk assessment. In my judgment given the various matters which I have identified I consider that at the date of leading counsel’s CFA there was a 65% prospect of a successful outcome such that counsel would recover his fee and uplift. The 35% chance of loss I derive by attributing equal weight to the factors (a) to (c) which I have summarised above. I will not make any further reduction to reflect the fact that a Part 36 risk, if it materialised, would not necessarily affect the whole of counsel’s fees because in my judgment on the facts of this case a very early and competitive Part 36 offer after leading counsel was involved would have been a realistic expectation such that most or all of leading counsel’s fees would likely have been subject to the relevant Part 36 risk. The 65% prospect of success translates into a success fee of 54% which is the uplift I will allow.[97]I will invite the parties to propose an agreed order to conclude this assessment (the remainder of which has been completed in quantum terms subject to the points dealt with here) and if not agreed then I will deal with any argument arising at the time of handing down. DEPUTY MASTER VICTORIA WILLIAMS, COSTS JUDGE

Cited in 1 later judgment