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Recovering and challenging additional liabilities - Andrew Roy, 12 King's Bench Walk

22/02/19. In NJL v PTE [2018] EWHC 3570 (QB) Martin Spencer J set out the proper method for quantifying the risks associated with Part 36 offers for the purposes of assessing success fees. This case demonstrates the importance of any claim for an additional liability being properly supported by evidence.

Background

The Claimant was a car passenger who suffered catastrophic injuries on 14 May 2010. These rendered him a protected party. Liability was never in dispute. The claim settled slightly less than three months before trial for a £1,150,000 gross lump sum, £34,000 p.a. periodical payments and costs.

The Claimant’s solicitors entered into a CFA (CFA (1)) on 19 July 2010. Following a change of litigation friend they entered into a second CFA (CFA (2)) on 20 August 2012. These both provided for a 25% success fee if the claim settled more than 3 months before trial and 100% thereafter. The terms of the CFAs were conventional. “Success” was defined simply in terms of recovering any damages. If the Claimant rejected an effective offer to settle on advice, no fees were recoverable for the relevant period thereafter. CFA (2) was a “CFA lite”; any costs not recovered from the Defendant would be waived. The risk assessments in support of the CFAs were largely pro forma and did not set out any arithmetical basis for the success fees.

The effect of pre-April 2013 rules was that (a) the default position was that the success fee was fixed at 12.5%; (b) the Claimant could apply for higher figure; (c) if the Claimant established that the correct success fee was more than 20%, he would recover that higher figure; (d) if not the default of 12.5% applied.

The Claimant applied for success fees of 100%, although at the assessment hearing itself reduced figures of 67% were sought. District Judge Searl held that in respect of CFA (1) he was limited to 12.5%. However, she allowed 65% in respect of CFA (2). She did so by reference to the fact that between CFA (1) and CFA (2) further information about the Claimant’s history had come to light which made...

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