The Court of Appeal
Date: 19/05/08

The Issues: The Claimant had entered into a CFA, with a success fee of 12.5%, although she had the benefit of BTE insurance. Damages of £3,068.84 had been agreed in relation to an RTA claim without proceedings being issued. The Defendant argued that it was unreasonable to pay any part of a success fee when the Claimant had the benefit of a BTE insurance policy which would have enabled her solicitors to have conducted this claim without risk.

Held: The Court of Appeal agreed with the lower courts that under the fixed recoverable costs scheme (CPR Part 45.11(1) ) the Claimant was entitled to recover its success fee and the Court had no discretion to adjust or disallow it . The scheme fixes the success fee at 12.5% and provides no discretion to vary that percentage even where the Claimant has a BTE insurance policy in place.

Comment: The Court of Appeal confirmed that the intention of the CPR Parts 45.7 to 45.14 is to provide an agreed scheme for easily calculating costs and to give certainty of recovery. The Court was effectively approving the previous inferior court decision of Nizami v Butt (in the High Court in 2006). Under the fixed costs regime, a success fee is recoverable irrespective of whether existing legal expenses insurance (a “BTE policy”) existed, and irrespective of whether or not its existence was investigated. The Claimant’s solicitor of course has a quite separate professional obligation to investigate whether the Claimant has the benefit of an existing BTE insurance policy (Rule 2.03(1)(g) of the Solicitors Code of Conduct 2007), but failure to adhere to the Code will not normally result in an inability to recover costs or the success fee Garbutt & Anor v Edwards & Anor (2005).

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