COSTS — Order for costs — Fixed recoverable costs— Small road traffic accident claim — Claimant with before the event insurance instructing solicitors under conditional fee agreement providing for success fee — Defendant admitting liability before action — Whether claimant entitled to success fee — Whether court having discretion to disallow success fee — CPR r 45.11(1)

Kilby v Gawith; [2008] WLR (D) 163

CA: Sir Anthony Clarke MR, Arden and Dyson LJJ: 19 May 2008

The court had no discretion under CPR r 45.11(1) to disallow a successful claimant a success fee provided for in the conditional fee agreement with her solicitors.

The Court of Appeal so held, dismissing an appeal by the defendant, Donald Gawith, from the order of Judge Stuart QC, made in the Liverpool County Court on 14 August 2007, in which he upheld the decision of District Judge Peake, made in the Birkenhead County Court on 23 March 2007, that the claimant, Jane Kilby, was entitled to costs which included a 125% success fee.

The defendant disputed the claimant’s entitlement to the success fee on the ground that she already had before the event insurance which would have enabled her solicitors to have conducted the claim without risk, that it was therefore unreasonable for her to have entered into a conditional fee agreement with her solicitors which provided for a success fee, and that the court should therefore exercise its discretion under CPR r 45.11(1) to disallow the fee.

SIR ANTHONY CLARKE MR said that the natural meaning of the words “the claimant may recover a success fee” in CPR r 45.11(1) was that the claimant was entitled to recover a success fee, provided the conditions were satisfied. Although not on all fours with the present case, it was clear from Nizami v Butt [2006] 1 WLR 3307, paras 22–24, approved in Lamont v Burton [2007] 1 WLR 2814, that the purpose of CPR rr 45.7–45.14 was to provide fixed levels of remuneration which were regarded as fair when taken as a whole. Before the event insurance was important (see Sarwar v Alam [2002] 1 WLR 125, para 46), but its importance did not require a different construction of CPR r 45.11(1).

ARDEN and DYSON LJJ agreed.

Appearances: Jeremy Morgan QC (McCullagh & Co, Peterborough) for the defendant; Nicholas Bacon (Camps, Birkenhead) for the claimant.

Reported by: Isobel Collins, barrister