Puksis v Brumby [2008] EWHC 90095 (Costs)

Posted on Thursday, January 31st, 2008

The Claimant sustained severe head injuries on 07/05/01 when he was knocked down by a car driven by the Defendant. His mother acted as his Litigation Friend. A CFA was entered into on 02/04/02 and proceedings were issued on 24/10/03. On 02/02/04, judgement was entered for the Claimant for 50% of the damages to be assessed. On 09/10/06, during negotiations at Court for the assessment of damages, the Defendant agreed to pay the Claimant damages of £900,000 with the Claimant’s costs to be assessed in default of agreement. Costs were not agreed and the Claimant submitted costs of £250,050, excluding VAT for detailed assessment.

The Defendant served Points of Dispute on 28/08/07 and in light of the matter raised, the following were to be determined as preliminary issues:

  1. Whether there had been a material breach of Regulation 4(2)(e) of the CFA Regulations 2000 by the Claimant’s solicitor in not informing the Claimant of his interest in recommending the Accident Line Protect insurance policy.
  2. Whether there had been a material breach of the CFA Regulations 2000 by the Claimant’s solicitor by not making adequate enquiries as to whether the Claimant had BTE available.
  3. Whether the Claimant was liable only to pay rates increased by the retail price index or liable to pay the hourly rates claimed in the Bill.
  4. Whether the Success Fee of 90% claimed was reasonable.

With regards to 1st preliminary issue, Master Gordon-Saker found that in light of the solicitor’s letter to Mrs. Puksis dated 20/03/02 where he told Mrs. Puksis that under the firm’s membership of the Accident Line scheme, it was obliged to recommend the ALP policy and in light of the solicitor going through this letter with Mrs. Puksis in his meeting 7 days later, the solicitor had given the oral explanation required and fulfilled the obligation to provide the information required by regulation 4(2)(e) in writing.

Following a meeting with Mrs. Puksis on 09/10/02 and on examination of the documents she brought with her, it was discovered that she did not have household contents insurance, nor did she drive or have credit cards. Therefore it was found that with regards to the 2nd preliminary issue, there was no breach of regulations 4(2)(c) or (d) of the 2000 regulations as the solicitor had made enquiries that were sufficient as to the existence of other insurance and as to the possibility of alternative methods of funding the claim.

The CFA stated the hourly rates that would be charged and stated that these rates would be reviewed but would not increase by more than the rise in the Retail Prices Index and that the Claimant would be notified in writing of the increased rate. Mrs. Puksis was informed of the increases in the rates in writing, however, these increases exceeded the RPI. Master Gordon-Saker found that few clients would check whether the increases in the rates notified exceeded the RPI and that a unilateral increase which was greater than that allowed by the CFA could not amount to a mutual variation of the agreement. In addition, the lack of complaint by the Claimant could not be taken to be consent. Therefore it was found that Mrs. Puksis was not liable for any more than the rates set out in the CFA as increased by the RPI.

With regards to the 4th preliminary issue, it was Master Gordon-Saker’s judgment that the case carried considerable risk for the solicitors of the Claimant as at the time of the accident, the Claimant had been drinking and was in the middle of the road. There was evidence that the Defendant may not have had time to avoid the Claimant but also evidence that the Defendant had been driving too fast. It was not likely that the Claimant would be able to give evidence himself. Therefore, it was found that it was not unreasonable for the prospect of success to be assessed at 50% at the time the CFA was entered into and so the Claimant was entitled to recover from the Defendant a success fee of 90%.

http://www.bailii.org/ew/cases/EWHC/Costs/2008/90095.html

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