The post LASPO era has not exactly been the ‘golden years’ for personal injury lawyers.
Among the main changes was in relation to success fees. Success fees that were awarded to solicitors upon entering into a CFA would now no longer be recoverable from the paying party and instead would be payable by the Claimant. The consumer protection legislation introduced at the same time in the form of the Conditional Fee Agreements Order 2013 put a cap on the maximum sum the solicitor can charge a client in a personal injury claim by way of a success fee to 25% of the damages.
The battle however is not over. This time, it is not the government and judiciary who are on the offensive, but is none other than our fellow solicitors!
A new species of solicitor has emerged. Instead of pursuing a career in compensating victims of injury, she is instead tracking Claimants who have had a deduction of their damages and assessing whether a refund is due.
When does this situation arise? Supposing you take on a low value claim and you enter into a CFA with a success fee of 100%. You then stipulate that you will deduct the success fee from the damages, but limit this to 25% of the damages.
Your claim then settles for £10,000.00 with an incurred WIP of £2,000.00 to date. Most practitioners then simply deduct 25% of the damages. Unfortunately this is improper conduct. For an RTA, for example, in accordance with old rules, the success fee was fixed at 12.5%. The deduction should therefore be as follows:
| WIP | Success Fee (12.5%) | Deduction (25%) |
| £2,000.00 | £250.00 | £250.00 (Not £2,500.00) |
In A and M v Royal Mail Group [2015] EW Misc B24 (CC), in a case involving two children who were victims in a road traffic accident, the Claimant law firm charged a standard 100% success fee, to be capped at 25% of damages. The firm did not conduct a risk assessment of the case before assessing the success fee.
In a sharply worded judgment, DJ Lumb was quite clearly fractious with this approach.
DJ Lumb commented ‘it seems it has now become commonplace for solicitors to enter conditional fee agreements with clients with a stated success fee of 100%, even though the prospects of the claim being successful are virtually certain’.
In fact DJ Lumb went even further, citing one pre-Jackson case; Beal v Russell [2011] SCCO in which the SCCO calculated the appropriate level of success fee in a rear-end shunt at just 5%.
What really incensed DJ Lamb, was the fact that the 100% success fee was simply applied without any risk assessment of the particular case whatsoever; ‘Indeed, if solicitors/litigation friends wish to justify proposed deductions from damages as being reasonable, then a risk assessment would be at least highly desirable as evidence in support of their arguments.’
This trend is on the up and Master James has noticed that courts are receiving a large and increasing number of these types of claims.
In Hanley v JC & A Solicitors and Green v SGI Legal LLP [2018] EWCA 2095(Civ), a solicitor’s past client brought Part 8 proceedings seeking an order for delivery of the solicitor’s file. In Hanley, the client argued that these words give the court the power to order something other than delivery up, in this case the provision of copies of documents (subject to payment by the client for the copies).
Master James however identified the Law Society’s Practice Note that specifies “Who owns the file”, which maintains that there are many papers on a solicitor’s file which belong to the solicitor and do not need to be handed over to the client, including: documents prepared for the firm’s own benefit or protection; copies of the firm’s internal correspondence; correspondence by the client to the solicitor; accounting records.
In her ruling, Master James said she was ‘concerned by the floodgates that would likely be opened’ by a ruling that solicitors can be ordered to hand over their complete file. ‘Such a move would foreseeably instil considerable satellite litigation and I am not persuaded that this would be a positive step,’ Master James remarked further; ’I am not persuaded that I should order production of documents that do not belong to the claimant.’
In summary, although these genre of claims are indeed becoming more popular, solicitors can be reassured that they unlikely to be ordered to hand over the full file of papers. Perhaps this will be the end of these fishing expeditions.