Darya Belsner v Cam Legal Services Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Lavender |
| Judgment Date | 16 October 2020 |
| Neutral Citation | [2020] EWHC 2755 (QB) |
| Date | 16 October 2020 |
| Docket Number | Claim No: E90SE056 |
| Court | Queen's Bench Division |
[2020] EWHC 2755 (QB)
Mr Justice Lavender
Claim No: E90SE056
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LEEDS DISTRICT REGISTRY
ON APPEAL FROM
SHEFFIELD DISTRICT REGISTRY
Combined Court Centre
1 Oxford Row
Leeds LS1 3BG
(Remote hearing on Skype for Business)
PJ Kirby QC and Robin Dunne (instructed by Clear Legal Limited t/a checkmylegalfees.com) for the Claimant
Nicholas Bacon QC (instructed by the Defendant) for the Defendant
Hearing date: 12 May 2020
(1) Introduction
In this case each party appeals with permission granted by District Judge Bellamy against a different part of his order of 14 August 2019, made in the Sheffield District Registry of the High Court, on an assessment pursuant to section 70 of the Solicitors Act 1974 of the Defendant's bill of costs relating to work done by the Defendant for the Claimant in a claim for damages for personal injury arising out of a road traffic accident on 5 February 2016, which was made under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (“the Protocol”) and which was settled following submission of the Stage 2 Settlement Pack for £1,916.98 in damages, plus fixed costs and disbursements of £1,783.19 including VAT.
The Claimant appeals against paragraph 1 of DJ Bellamy's order, which was in the following terms:
“The Defendant's bill be assessed in the sum of £3,104.15 (being base profit costs of £1,392.00, success fee profit costs of £208.80, VAT on profit costs of £320.16 and disbursements of £1,783.19 inclusive of VAT).”
The grounds of the Claimant's appeal are as follows:
(1) Pursuant to section 74(3) of the Solicitors Act 1974, the amount allowed on assessment should not, except where rules of court permit, exceed the amount which could have been allowed as between party and party in the proceedings.
(2) The district judge held that the rules of court did permit the allowance of a greater amount, because CPR 46.9(2) applied, in that the Defendant and the Claimant had entered into a written agreement which expressly permitted payment to the Defendant of an amount of costs greater than that which the Claimant could have recovered from another party to the proceedings.
(3) There was indeed a written agreement which made express provision to that effect, but the Claimant contended that it was also a requirement that the Claimant had not merely signed that agreement, but had given informed consent to it, which required the Defendant to give the Claimant “a full and fair exposition of the factors relevant to it”, which the Claimant contended that the Defendant did not do.
(4) The district judge rejected this contention. The Claimant contends on her appeal that he was wrong to do so.
The Defendant appeals against paragraph 2 of DJ Bellamy's order, which was in the following terms:
“The profit costs in the bill having been reduced by 37%, the Defendant do pay the Claimant's costs in respect of today's hearing. The court assesses the costs at £2,550 plus VAT and Court fee of £424.”
The Defendant's grounds of appeal are as follows:
(1) The Defendant capped its claim for costs at the sum (which in the event was £2,168.89) of the amount recovered in respect of costs from the defendant to the personal injury claim (i.e. £1,783.19) and 25% of the relevant damages recovered by the Claimant (i.e. £385.50). The bill of costs set out a larger amount, which the Defendant could have claimed, but £2,168.89 is all that the Defendant had ever claimed from the Claimant.
(2) The result of the assessment was that the Defendant was still entitled to payment in full of the only sum which it had ever claimed from the Claimant.
(3) The district judge ought to have awarded costs to the Defendant and:
(i) was wrong to hold that he was constrained by section 70(9) of the Solicitors Act 1974 to award costs to the Claimant; alternatively
(ii) was wrong to conclude that there were no special circumstances under section 70(10) of that Act.
This is clearly a test case. In itself, this could be seen as a case about £385.50 in costs and the costs (which were assessed at £3,484 in total) of the assessment of the Defendant's bill. However, the Claimant's solicitors, Clear Legal Limited, trading as checkmylegalfees.com, have acted for the clients in other, similar cases, several of which have resulted in assessments conducted by District Judge Bellamy which are the subject of appeal. No doubt similar issues could arise in many other cases. Consequently, the parties appear to attach considerable importance to this appeal. According to their statements of costs, the Claimant and the Defendant have spent £52,575.63 and £35,139.70 respectively on this appeal. That is a total of £87,715.53, which is over 225 times the amount of £385.50 originally at issue.
(2) Background
The story starts with the Claimant's involvement in a road traffic accident on 5 February 2016. Her account, which was not challenged, was that she was knocked off the motorcycle on which she was a pillion passenger by a car driven by Mrs Angela Barford. There were cuts, bruises and swelling to the middle finger of her right hand, her right elbow, left knee and right ankle. She was off work for one day. Since the motorcycle was not hers, she did not have a claim for the damage to the motorcycle.
The Claimant contacted her insurance brokers, who contacted the Defendant, trading under the name of Scooters and Bikes Legal. On 7 March 2016 a paralegal, Julie Brown, sent a Client Care Letter to the Claimant, enclosing, amongst other things, the Defendant's Terms and Conditions of Business and a conditional fee agreement (“the CFA”).
The Client Care Letter stated, inter alia, as follows:
“7. The Conditional Fee Agreement (no win, no fee agreement) sets out in further details how this firm's fees are calculated. Our charges are based on the time we spend dealing with the case.
8. Please read the Conditional Fee Agreement carefully and telephone me if you have any questions concerning the document.
9. If you win your case you will be liable to pay our basic charges and in addition a success fee as set out in the agreement. If your claim for pain and suffering is below the small claims limit (currently £1,000) then we will offset our charges against your general damages up to a maximum of £500 (including VAT).
10. If your claim is above the small claims limit, you can claim from your opponent part or all of our basic charges and disbursements.
11. The success fee is calculated with reference to your costs and will not apply to claims below the small claims limit, but will apply to claims above the small claims limit.
12. The success fee will be deducted from your damages at the end of your claim. The success fee cannot be more than 25% of your damages (inclusive of VAT), although there may be other costs or disbursements to be deducted from your damages such as the insurance premium.
13. The success fee is based upon your basic costs. For example if you have a claim which is settled at £4,000 damages, you will pay no more than £1,000. This means you will receive £3,000.
14. The success fee is calculated based upon the degree of risk. A success fee can be up to 100%. Taking the above example where you have settled your damages claim for £4,000 if your costs are £2,000 then the success fee would capped at £1,000 (25% of your damages).
…
18. In cases involving road traffic accidents worth less than £25,000, the amount that the Defendant is liable to pay in respect of our basic charges is fixed by the provisions of the Civil Procedure Rules.
19. We reserve the right to charge you the actual costs taking into account any recoverable costs from the Defendant.
…
23. Most Personal injury claims settle by negotiation after medical evidence and details of financial losses had been obtained. I estimate that the basic charges for the work necessary to obtain this information will be £2,500 (excluding VAT and disbursements – see paragraph 26 below). We will update this estimate of costs every six months sand inform you if it appears that any estimate may be exceeded. This could change significantly for a number of reasons, for example, if proceedings have to be issued, there are complex legal or medical issues, the Defendant defends the claim, there is a complex loss of earnings claim or if there is an allegation of fraud.
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26. We will not usually send you a bill for our basic charges, success fee and disbursements until the Conditional Fee Agreement ends. It is important that you understand that you will be responsible for paying any bills. However, assuming you win your claim I expect to recover some of our charges and expenses from your opponent.”
The Defendant's Terms and Conditions of Business stated, inter alia, as follows:
“17. The charges agreed between us may exceed the costs recoverable from another party. This means that in practice there may be a proportion of your costs which you will have to bear yourself irrespective of any order for costs which may be made against the opposing party or parties.
18. As between the parties to litigation or arbitration in England and Wales, the usual position (which is subject to exceptions) is that the losing party will be ordered to pay a significant part, at least, of the winning party's legal costs (as well as the losing party's own costs). An order for payment of costs as between the parties will usually be made at the end of proceedings, but may also be made during the course of proceedings, for example following...
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