Court scrutinises legal costs in road accident claim

High Court scrutinises legal costs in road accident claim

The High Court, sitting at the Senior Courts Costs Office, has delivered a significant ruling in the case of AKS, a protected party represented by her grandmother BXG, against the National Farmers Union Mutual Insurance Society Limited. The case revolved around the assessment of legal costs following a substantial damages settlement for injuries sustained by AKS in a road traffic accident.

AKS, who lacks the capacity to conduct litigation, was awarded a settlement of £3.7 million after proceedings concluded in November 2022. The order approving the settlement also stipulated that the claimant's legal costs, payable to Seth Law Limited, should be subject to detailed assessment under the Civil Procedure Rules (CPR).

The application for assessment was initially filed by Seth Law on 13 June 2023, seeking a success fee of 25% of the claimant's award. However, the court's scrutiny revealed that the success fee claimed was not justified by the risk undertaken by the solicitors, nor was it adequately explained to the claimant or her litigation friend.

Costs Judge Leonard highlighted that the success fee must reflect the risk of the solicitor going unpaid, which in this case was minimal given the circumstances of the accident and the admission of liability by the defendant. The court found that the success fee set at 25% was excessive and not supported by an informed consent from the claimant or her litigation friend.

Despite Seth Law's assertion that the success fee was within the discretion of the claimant's deputy, Mrs Coral Williams, the court clarified that any deduction from the claimant's damages required court approval. The absence of a comprehensive solicitor/client bill further complicated the assessment process.

Ultimately, the court assessed the success fee at 15% of the basic charges, amounting to £16,502.64, significantly lower than the £73,750 initially deducted. The court ordered Seth Law to repay the overcharged amount to the claimant, though the firm's liquidation status cast doubt on the recovery of these funds.

This case underscores the importance of transparency and proper risk assessment in conditional fee agreements, particularly when dealing with protected parties. It also serves as a reminder of the court's role in safeguarding the interests of vulnerable claimants in legal cost matters.

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For more information on medical negligence, see BeCivil's guide to Medical Negligence.