Mr Ryan Perrett v Wolferstans LLP

Hearing dates: 10 and 11 July 2024

Approved Judgment

This judgment was handed down remotely at 10.30am on [date] by circulation to the parties or their representatives by e-mail and by release to the National Archives.

COSTS JUDGE Rowley

Introduction

This is my reserved judgment in respect of preliminary issues 2, 3, 4 and 5 of the claimant's points of dispute following a hearing on the 10 ^th and 11 ^th of July 2024 at which the claimant and Ms Tracey Barton of the defendant gave evidence and detailed submissions were made by Mr Carlisle for the Claimant and Robert Marven KC for the Defendant.

Points of dispute 2, 3 and 4 concern wide ranging challenges to the nature of the retainer between the claimant and defendant, the construction of it and the applicable primary and secondary legislation. The fifth point of dispute concerns the method of assessment of the non-contentious costs contained within the defendant's bill. As I have described them, the last point of dispute is a self-contained point which I deal with at the end of this judgment. The other three points are interrelated, both in terms of evidence and submissions, and consequently I have not sought to separate them during the course of this judgment. Under the heading of “The Evidence” I have dealt with the main factual disputes. I have separately referred to other elements of the witnesses' evidence in parts where that appeared more convenient.

I have generally referred to “the claimant” when describing the background to his case and the submissions made by Mr Carlisle. In setting out and discussing the key evidence, I have generally referred to “Mr Perrett” on the basis it made matters clearer but it has no other significance.

The Evidence

The claimant instructed the defendant to act on his behalf in respect of an accident which occurred on 1 December 2018. On that evening, the claimant was at work when he suffered an accident through slipping on a spillage which had not been properly cleaned up. As a result of the accident, he sustained injuries to his wrist, neck and shoulder.

The claimant knew that the defendant's offices were in his local area and, having telephoned the receptionist to ascertain whether they acted on a “no-win, no fee” basis, he discussed his claim at the telephone with someone who he recollects as being Tracey Barton. According to his witness statement, the claimant asked Ms Barton if she would take his case on under a no win, no fee agreement and “she said that she would make this decision when I had completed the accident details form.”

The Two Disputed Conversations

The claimant completed an enquiry form and was assisted by his partner in completing it because of his wrist injury. He delivered the form by hand to the defendant's offices a few days later. One of the central pieces of evidence relied upon by the claimant was his conversation with the receptionist at the time of handing in his form. He describes, at paragraph 15 of his witness statement, the conversation as follows:

“I specifically remember having a conversation about the legal fees with the lady who was sat on the reception desk when I handed my completed accident form in. I told that lady that I had never had a personal injury claim before and didn't know how it worked with paying fees. I recall specifically that the lady I spoke to advised me that if the Solicitors were going to work for me on a no win no fee basis all my legal fees would be paid by the other side if my claim was successful. If the claim wasn't successful, I wouldn't have to pay anybody anything.”

In the witness box, Mr Perrett described how he had felt the need to get out of his house and so had received a lift from a friend to the solicitors in order to drop the form in. He had no appointment but was able to hand the form to a smartly dressed woman sitting at the reception desk. Under cross examination, the extent of the conversation with the receptionist altered from the description in the witness statement so that the description of the mechanics of a no-win, no fee agreement was given by Mr Perrett rather than the receptionist. Her role reduced to responding by saying “that's right”. Mr Perrett said in the witness box that he had used words to the effect of:

“Am I correct in saying, if I lose, I don't pay, if I win are all my costs covered by the other side/my employers?”

Mr Perrett distinguished between the merits of his case, which he would only expect to discuss with the person actually running his case and the business practice of using no-win, no fee agreements, which he thought anyone working at the solicitors would know about.

In her witness statement, Ms Barton disagreed with paragraph 15 of Mr Perrett's witness statement. At paragraph 10 of her statement she said the following:

“I have no knowledge as to whether the Claimant hand-delivered the form or not as it would have just been scanned with my post; however our reception staff would not comment as to the funding of the claim as it is not part of their job to do so and they are not informed of how claims are funded so would not have the necessary knowledge to answer. If such a question had been raised it would be usual for a member of reception staff to ask for the fee earner or a member of the PI department to attend to discuss with the client.”

In the witness box, Ms Barton accepted that she had no first-hand knowledge of the claimant's conversation with the receptionist. She reiterated that although the receptionist would be aware of the fact that the firm used no-win, no fee agreements, at least in some areas of the practice, they did not know the mechanics of them. Ms Barton relied upon the document subsequently signed by the claimant which contradicted his description of how he said the CFA worked.

Ms Barton's comments echoed the cross examination of the claimant regarding the wording of the conditional fee agreement (“CFA”), which he subsequently signed on 10 January 2019, insofar as it related to paying the defendant where the case was successful. Under the heading “Paying us if you win” Mr Marven asked Mr Perrett to read out the following passage:

“You are entitled to seek recovery from your opponent of part or all of our basic charges, disbursements, your Barrister's fees and VAT, but not our success fee or the Barrister's success fee (if the Barrister is instructed under the terms of a Conditional Fee Agreement with us). If you do not recover all of our basic charges, disbursements and your Barrister's fee (if instructed) from your opponent or any other third party liable to pay them then you will be liable to pay them and we reserve the right to deduct them from your damages.”

Mr Perrett said that he understood this passage to mean that if the other side did not pay the costs for some reason, then he might be liable for the costs but since the other side were covering everything, he would not pay any costs. This was sufficiently clear to him that he did not feel the need to check his interpretation (having already spoken to someone (i.e. the receptionist) at the defendant company.)

When taken to the letter which contained the CFA and the terms and conditions, Mr Perrett said that the paragraph in bold seemed to be more important than other things in the letter and, as such, he was drawn to it. He described it as the “crucial passage” in the CFA covering letter. The emboldened paragraph can be found under the heading “What do I pay if I Win?” and says:

“It is the policy of this firm to aim to ensure that the overall amount we will charge you for our basic charges, success fee, expenses and disbursements, any Barrister's fees (and success fee, if the Barrister is instructed under the terms of a Conditional Fee Agreement with us) (inclusive of VAT), after any contribution to your costs has been paid by your opponent, is limited to a maximum of 25% of the total damages you receive.”

The notion of a contribution to Mr Perrett's legal fees set out in both this quotation and the quotation above from the CFA itself, did not sit easily with Mr Perrett's evidence that he expected all of his fees (with the possible exception of the After The Event (“ATE”) insurance policy) to be paid by his opponent.

This apparent contradiction was highlighted when Mr Perrett was taken by Mr. Marven to the correspondence between Mr Perrett and his former solicitors when considering making offers to settle his claim and considering offers made by his opponent's insurers. For example, in a letter dated 21 October 2021, following advice to make a settlement offer of £7,334.63, the pre-penultimate paragraph of that letter stated:

“I would remind you that on settlement of your claim there will be a deduction in respect of the insurance premium with ARAG Insurance in the sum of £319.20 and this firm's costs. Any contribution in respect of this firm's costs will be limited to 25% of your damages.”

Mr Perrett signed a mandate regarding the making of the offer two days later and which specifically recorded the sum to be offered of £7,334.63.

Upon receipt of the claimant's offer, the opponent made a counter offer of £7,102.61 which Tracey Barton had no hesitation in recommending to Mr Perrett should be accepted. The letter is dated 17 November 2021 and set out a list of two deductions that would be made from the damages. The first was the ATE insurance premium. The second was:

“This...