Area(s) of Law :
Source : 16/2/06 unreported, QBD Simon J, Master Hurst
CFAs and recoverable costs The claimant suffered injury in an RTA and entered a CFA in relation to the claims. The claim was settled. The Claimant’s solicitors sought fixed recoverable costs, disbursements and a success fee pursuant to CPR 45.9 and CPR 45.11. Costs could not be agreed. Costs only proceedings were commenced. The Defendant challenged payment on the grounds that it was not satisfied there was compliance with the Conditional Fee Agreements Regulations 2000 so as to render the CFA enforceable.
The Judge held that although the disbursements were subject to assessment, the indemnity principle did not apply to the entitlement to fixed recoverable costs under CPR 45.9 and CPR 45.11 so it did not matter whether the CFA was valid and enforceable. The Defendant submitted that not only was the indemnity principle fundamental to the costs regime, the CFA had to be lawful to be enforceable.
The Court of Appeal held that the intention underlying CPR 45(II) was to provide an agreed scheme of costs recovery which was certain and easily calculated by providing fixed levels of remuneration. In some cases it may over compensate, in others under but in general payment overall would be fair. It was clear that the indemnity principle did not apply to the figures that were recoverable and so there was little reason why the indemnity principle should have any application to CPR 45.9 or CPR 45.11 and good reason why it should not. The whole idea underlying CPR Part 45 (II) was that it should be possible to ascertain appropriate costs without having to have further recourse to the Courts.
Further, there was no overriding need for the paying party to satisfy itself that the CFA was compliant with the regulations. All the receiving party had to show was that the conditions laid down under the Rules had been complied with.