CHILDREN, SUCCESS FEES AND DEDUCTIONS FROM DAMAGES : AN IMPORTANT JUDGMENT

One Response

1. 

   Daniel Higgins · August 17, 2015 at 11:03:40 · →

   With the greatest of respect to District Judge Lumb I am very surprised at the almost naïve approach to the wider implications of such a Judgment. To make such a sweeping statement that there is no justification for an ATE Premium in these matters without hearing fuller argument from perhaps a more senior advocate is very disappointing. I know, from experience, that very junior advocates are sent on behalf of Solicitors for these types of hearing due to the significant reductions in costs recoverable from the Defendant. That’s the commercial reality these days with the introduction, and subsequent reduction, of fixed costs and the implications of Dockerill v Tullett. I’m not suggesting they are incompetent for one moment but whether they are acutely aware of the issues in respect of ATE Premiums and Success Fees (not having personal conduct of the matter nor the commercial knowledge of the firm) I’m not so sure of. The Judge was clearly probing for answers he was never going to get. For the identical reasons as to why he was not in a position to assess the success fee (there being no risk assessment present) he should have declined to assess the recoverability of the ATE Premium (the recoverability of which is surely risk based?).

   In respect of the further observations I think that Judges, in their role as guardians of the interests of protected parties, DO need to consider the economic reality and consequences of their decisions. It is part of their role as guardians of protected parties to ensure that all settlements are brought before them. If it becomes uneconomic for Solicitors to represent children then there will be a grave injustice with the children left unrepresented and at the mercy of the self serving insurance companies with their parental indemnity forms. Of course, not only is the protected party unrepresented so as to not be properly advised on the merits of any settlement proposed but the main safeguard of the court is also circumvented. We all know that no settlement is binding without the approval of the court but do the unrepresented know this??

   My final thoughts on the Judgment are this. If the Learned Judge wanted to create some helpful guidance to Judges in similar predicaments then surely the best thing would have been simply to say in the absence of a risk assessment justifying anything higher the solicitors can have a success fee equivalent to 10% of the damages. As identified at paragraph 43 of the Judgment, the 10% increase in general damages was intended to blunt, somewhat, the recovery of the success fee from Claimants. To allow no success fee to be recovered from a protected parties damages would be to grant the protected party a windfall as the expense of those representing him. That, surely, is not the role of the court or what was intended by the Jackson reforms. In my opinion the role of the court is to ensure that the protected party is no worse off by virtue of the fact they lack capacity to deal with matters themselves. Allowing a minimum 10% ensures protected parties recover the same amount of compensation pre Jackson reforms and creates some form of legal certainty for Solicitors firms in respect of the amount of costs they are likely to recover in these types of cases. It should be noted that if my suggestion was uniformly adopted by Judges then protected parties will still be better off than non-protected parties who are likely to lose the full 25% of damages. At the moment it is a sorry lottery and allowing a firm to attempt to recover a success fee by way of detailed assessment is no solution when the irrecoverable expenses of detailed assessment will exceed any success fee likely to be awarded.

Comments are closed.