Arlene Fortune –v- Jonathan Roe [2011] EWHC 2953 (QB)

Posted on Thursday, November 10th, 2011

C sustained massive injuries in a road traffic accident on 8th December 2001. C instructed Irwin Mitchell under a BTE insurance policy. Liability was admitted on 27th March 2003. Quantum could not be agreed and proceedings were issued. Judgment for C was entered on 6th April 2005. The limit of indemnity under C’s insurance policy was reached and a CFA was entered into on 3rd February 2006 which provided for a success fee of 25% if the claim settled prior to 3 months before trial and 100% thereafter. It also contained a term that in the event of failure to beat a Part 36 offer, no profit costs would be chargeable more than 21 days after receipt of the offer. Trial was listed on 30th March 2009 but the matter settled for £600,000 less CRU, plus costs on 20th February 2009. At first instance Master Campbell found that following the entry of judgment, C was litigating in a risk free environment and any risks in assessing quantum could not justify a 100% success fee, even though it was staged. He assessed the success fee at 20%. C appealed on various grounds. The appeal judge held that Master Campbell had been wrong to find that the case was ‘won’ on the entry of judgment but right to find that there was no risk to the recovery of Irwin Mitchell’s costs until a Part 36 offer was made. There mere fact of a two-stage success fee did not necessarily mean that the second stage could always be justified. A substantial portion of the costs was already secure following the entry of judgment. A Part 36 offer was likely to be made shortly before trial when most of the costs had already been incurred. In the circumstances a 100% success fee was unreasonable. Appeal dismissed. C –v- W & Williams –v- Yasin considered.

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