In the case of A (1) and M (2) (Both by their Father and Litigation Friend MS) v Royal Mail Group, Birmingham County Court considered what a law firm could charge to their clients.
The case involved two children who suffered minor injuries in a road traffic accident claim. The Court considered whether the After The Event Insurance premium and firm’s success fee could be charged to the client.
The Judge decided that she could not assess the success fee as the solicitors had not complied with a Practice Direction stating that solicitors have to advise about funding arrangements and the level of risk involved in a claim.
The Judge did say that “The Court is concerned, however, in performing its duty under CPR Part 21 to consider whether a 100% success fee was a reasonable expense both in amount and whether it was reasonably incurred at all.” The Judge thought that “Had a risk assessment been carried out in the present case the prospects of success were so high as to be virtually certain. An appropriate success fee might have been as low as 5% as in Beal v Russell or possibly nothing at all.”
In respect of the ATE premium the Judge decided it could not be charged to the clients as the risk of claim failing was so low that any competent solicitor would not have obtained an ATE premium.
The case demonstrates that you must be fully informed by your solicitors as to why certain costs have incurred, and those costs must be justifiably incurred.
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