CFA not Measured by Costs at Risk: The Court of Appeal held that the lawfulness of a percentage increase in a conditional fee agreement was measured not by the costs at risk but by reference to the fees that would have been payable if the agreement in question had not been a CFA. The concept of “costs at risk” formed no part of the definition of a CFA that provided for a success fee in section 58 of the Courts and Legal Services Act 1990.
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Additional Solicitor must be Included on Bill for Detailed Assessment: Held that where a party sought to recover costs in respect of two separate firms of solicitors, both sets of costs should be included on the bill for detailed assessment. CPR 47.6 clearly provided that detailed assessment proceedings were commenced when the receiving party served a notice of commencement and the bill for costs not a bill for costs. If the party had instructed more than one firm, PD 47 required these additiona ...
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Reduction of Costs under CPR 44: The Court of Appeal held that a judge cannot reduce a party’s costs under CPR 44 merely because they had not done as well as they had hoped. The three Claimants had recovered damages for personal injury in sums much less than they had claimed on their Schedule of Loss, but the judge had explicitly rejected the Defendant’s argument that they had purposefully and dishonestly inflated their claims. In reducing the Claimants’ costs the judge had taken conduct into ac ...
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Work of Costs Consultants can attract a Success Fee: It was held that costs incurred by a firm of costs consultants in costs-only proceedings were properly regarded as ‘costs’ rather than ‘disbursements’, and thus liable to attract a success fee. It was said that there was a distinction to be drawn between work done on the behalf of the client and disbursements incurred on his behalf. In this case the work carried out by the consultants was undoubtedly solicitors’ work; it was the type of work t ...
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Award of Indemnity Costs. An application for indemnity costs against the respondent bank was granted as it had conducted its litigation in an unreasonable and unsatisfactory manner by pursuing allegations in a counterclaim that were deeply flawed from the start and had little prospect of success. It was said that where a court was considering whether a losing party’s conduct was such as to justify an indemnity costs order against that party, the minimum nature of that conduct required to engage ...
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Assessment of the Successful Party under Part 36 The Court of Appeal held that a judge had utilised his discretion correctly in ordering the defendant to pay the claimant’s costs from the date of a Part 36 offer that the defendant had not accepted until the date of settlement a day before the trial had been due to commence. CPR 36 did not provide for a suspension of the 21-day time limit while an offeree investigated an offer. CPR 44 allowed the court to take into account all the circumstances ...
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CFA Unenforceable where Material Non-compliance with Regulation. It was held that a Conditional Fee Agreement was not valid and enforceable because there had been material non-compliance with Regulation 4 of the Conditional Fee Agreements Regulations 2000 which requires solicitors to inform the client about the availability of insurance and other methods of financing the costs. The client had transferred to a firm of solicitors who were not on the panel of the insurers who were initially fundin ...
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Services provided by Sole Proprietor Solicitor Liable for VAT. A sole proprietor solicitor failed to establish on the balance of probabilities that his VAT assessment was incorrect. The services in question were to be treated as the provision of legal services rather than disbursements, which brought them within the scope of VAT. A profit element in the charge for land services took it outside the definition of ‘disbursements’ in the relevant EU Directive. The costs of telegraphic services and ...
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Unsigned Conditional Fee Agreement Unenforceable. Cardiff County Court held that a conditional fee agreement between a client and her solicitors because the solicitors had failed to sign it. Therefore, no costs referable to it were recoverable from the other party. A solicitor’s signature on a CFA was important, and not a mere trivial formality. The signature provided the client with protection against the possibility that an unscrupulous solicitor might seek to enforce his right to be paid reas ...
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Director liable for Company pursuing hopeless Counterclaim. Rimer J. held that where companies had irresponsibly pursued a hopeless counterclaim on the instructions and for the benefit of a controlling director, that director was made liable, jointly and severally with the companies, to pay the costs of the proceedings on the indemnity basis. It was an exceptional case in which the director was in substance the, or at least a, real party to the proceedings from start to finish.
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