The Issue

Was, as the appellant contended, it wrong in law for a judge to include a proportion of a CFA success fee within a maintenance-based award calculated by reference to the financial needs of a claimant?

Held

Dismissing the appeal, the Court of Appeal decided that a success fee under a CFA was capable of being treated as a debt of the Respondent and, therefore, could be considered as a “financial need” when calculating an award under the Act.  Lady Justice King stated that “…the judge was right in concluding that an order for maintenance could contain an element referable to a success fee…the judge concluded that without such contribution ‘one or more of the claimant’s primary needs would not be met’…[T]he judge was entitled to regard the success fee as a debt capable of inclusion in a maintenance award.”

Comment

This decision will bring hope to claimants under the Act, who are often without the financial means to mount litigation and, absent of the availability of Legal Aid to support their claims, are increasingly reliant upon the availability of a CFA to fund their proceedings.  If an element of the CFA success fee can be included within the award for financial provision, more of the total award will be retained by the claimant.  This may, of course, also encourage defendants to negotiate, with a view to achieving settlement before any success fee becomes payable.

It should be noted that the Respondent was only awarded a portion of the success fee payable (a sum equivalent to 25% of her base costs awarded whereas her CFA provided for a success fee of 72% of base costs).  Solicitors acting for claimants within such proceedings should be mindful that it is not certain that the full success fee will be awarded. 

It is also important to note that Lady Justice King observed that “…it will by no means always be appropriate to make such an order…unless the judge is satisfied that the only way in which the claimant had been able to litigate was by entering into a CFA arrangement and…the extent to which the claimant has ‘succeeded’ in his or her claim.”  Solicitors will need to ensure that all funding options are explored with the client and that such discussions are clearly recorded on the file and are capable of disclosure without compromising the privilege of the rest of the file.

The full judgement can be found at:https://www.bailii.org/ew/cases/EWCA/Civ/2021/1498.html

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