SUCCESS FEES:DEDUCTIONS FROM DAMAGES WHERE CLAIMANT IS UNDER A DISABILITY
The issue of deductions of success fees in cases when the claimant is under a disability remains a difficult one. I am grateful to Jane McBennett of Morrish Solicitors in Bradford for the attached note in relation to a court permitting a success fee to be deducted.
“RMS (Protected Party) –v- A & J M Ltd.
I acted for a Protected Party in a claim for damages for personal injury caused when her feeding tube was left unstoppered allowing her stomach contents to leak causing a nasty burn on her back. My client is a severely disabled adult who is blind, has severe mental disabilities and is unable to communicate. She lives at home with her mother and has a care package paid for by the Local Authority but supplied by a private company. We pursued a claim against the care company on the ground that it was one of their employees who had left the tube unstoppered allowing the stomach contents to leak.
The case was funded by a CFA with an ATE policy which included an unrecoverable element if the claim succeeded. The arrangement was that the Success Fee (including the insurance premium) would not exceed 25% of damages recovered. In assessing the risks we took into account the evidential difficulties of proving who was responsible for the injury where the Claimant was unable to speak for herself, no one had witnessed the accident and there were competing scenarios e.g. that the Claimant had accidentally dislodged the stopper or that one of her family had been careless. We assessed prospects of success at 55% which meant a success fee of 92%.
In fact following service of the Letter of Claim the Defendant’s representative indicated that they were willing to negotiate settlement of the claim without conceding liability. We therefore obtained a condition and prognosis report from a Plastic Surgeon. The burn had not healed but the Litigation Friend wished to settle the claim in view of the Claimant’s limited life expectancy and the fact that she was unlikely to survive any interventionist treatment. Counsel advised the claim fell into the £7,500 – £10,000 bracket. We entered into negotiations with the Defendant and achieved an offer to settle of £12000 which the Litigation Friend confirmed she wished to accept.
We took out an application for the Court to approve settlement of damages and also for 25% of the damages to be paid to the Claimant’s Solicitors pursuant to CPR 21.12. We lodged a statement from the Litigation Friend confirming her agreement to the deduction and also that she would have had no other means of funding the claim. We also lodged a detailed statement from the conducting solicitor which exhibited the documents relevant to the funding arrangements and the risk assessment. Costs were agreed with the Defendants prior to the Hearing in the inclusive sum of £11,000 which equated to costs of c£6400.00 after deductions.
The case was heard by Deputy District Judge Bailey in Newcastle County Court on 18 May 2016. She agreed to an Order under CPR 21.12 deducting a success fee of £3000.00 from the £12000.00 damages.
In truth if ever there was a case where the Court would be willing make an Order under CPR 21.12 this was it. Even after the deduction the Claimant still recovered damages within Counsel’s valuation of the claim, there were obvious risks in taking the case and the resulting success fee is c38%.”