Atack v Lee & Anor

Under the costs regime applying to road traffic accidents before 5 October 2003, the reasonableness of a conditional fee agreement success fee is assessed by reference to the facts and risks as they reasonably appeared when the agreement was made. The assessment must be specific to the individual claim.

A 20% success fee is ordinarily the maximum for a modest and straightforward road traffic claim without a special feature increasing the risk. The claim’s allocation to the multi-track or value above £15,000 does not alone justify a higher fee. Courts must not substitute the later fixed rates for this individual assessment. A two-stage success fee, reducing substantially if the claim settles within the protocol period, is permissible and encouraged.

These conjoined appeals concerned success fees under conditional fee agreements in personal injury claims arising from road traffic accidents before the fixed-cost regime took effect.

In Atack, a motorcyclist succeeded at trial on liability against a lorry driver and settled his damages claim for £30,000. On detailed assessment, Deputy District Judge Elsey reduced the contractual success fee from 100% to 50%. Judge Butler QC dismissed the claimant’s first appeal.

In Ellerton, a pedestrian was struck by a reversing vehicle. Liability was admitted and the claim settled for £15,378.79 after proceedings had begun. District Judge Brown allowed a 30% success fee. The central questions were how the litigation risk should be assessed when the agreement was made and whether either claim justified the percentage allowed below.

1. Atack appeal dismissed. The reasonableness of the success fee had to be assessed by reference to what was known, or should have been appreciated, by a reasonably careful solicitor when the conditional fee agreement was made. The solicitor’s risk matrix was of no assistance, so the deputy district judge correctly made an objective assessment using the information then available.

   The claimant faced a firm denial of liability and an apparently independent witness supporting the defendants. Nevertheless, he had two supporting witnesses and an assessment revealing weaknesses in the independent witness’s view of the accident. The risks were not as high as an even chance of failure. Although another judge might reasonably have allowed as much as 67%, the 50% figure fell within the range reasonably available to the costs judge. Judge Butler QC was therefore entitled not to interfere.

2. Ellerton appeal allowed. The guidance in Callery v Gray (No 1) [2001] EWCA Civ 1117 applied by analogy despite allocation to the multi-track and settlement for more than £15,000. The uncertainty about the driver’s identity could have been resolved by a telephone call to the police before the agreement was signed. The only significant residual risk was that the claimant might follow her solicitor’s advice but fail to beat a payment into court. That risk was among the rare risks already accommodated by a 20% success fee in the simplest claims. No feature justified the 30% allowed below, and the fee was reduced to 20%.

3. For claims governed by the pre-5 October 2003 regime, assessment remains case-specific and is made at the date of the agreement. A two-stage fee is permissible and encouraged. It may provide for a higher percentage if the claim continues beyond the protocol period and a much lower percentage, potentially 5% in the simplest case, if it settles within that period.

4. The fixed percentages subsequently introduced by the Civil Procedure Rules 1998 cannot simply be applied to earlier claims. They resulted from pragmatic industry-wide bargaining and do not reflect the facts and risks of each individual case.

1. Court of Appeal (Civil Division): In [2004] EWCA Civ 1712, dismissed Mr Atack’s appeal and allowed Mr Harris’s appeal, reducing the success fee in Ellerton to 20%.
2. Nottingham County Court: Judge Butler QC dismissed Mr Atack’s appeal from Deputy District Judge Elsey, who had reduced the allowable success fee from 100% to 50%.
3. Shrewsbury County Court: District Judge Brown allowed Mrs Ellerton a 30% success fee on detailed assessment. Judge Rubery granted permission to appeal and directed the appeal to the Court of Appeal.