Burton & Anor v Kingsley & Anor

The reasonableness of a conditional-fee success fee is assessed by reference to the circumstances known, or reasonably knowable, when the agreement was made. A passenger claim is not automatically a modest and straightforward road-traffic claim: disputed liability, uncertain evidence, possible unidentified defendants and serious injuries may justify a substantial uplift. A single success fee may be agreed, but it will generally be lower than the upper stage of a comparable two-stage fee. An offer outside Part 36 remains relevant to costs under the ordinary discretion, but indemnity costs require conduct or circumstances taking the case outside the norm.

The claim arose from a serious road accident in which the two claimants were passengers. Liability was disputed between the two defendants, and the claimants’ solicitors entered into conditional fee agreements providing for 100% success fees. The parties later settled liability on the day fixed for trial. Judgment was entered against the first defendant, the claims against the second defendant were dismissed, and the first defendant was ordered to pay the claimants’ liability costs.

The court then determined the recoverable success-fee uplift and whether those costs should be assessed on the indemnity basis. The claimants also pursued interest on costs, but withdrew that issue.

1. Success fee. The applicable regime was the regime governing accidents before 5 October 2003. Reasonableness had to be assessed at the date each CFA was entered into, by reference to what was then known or reasonably knowable. Later developments could illuminate the original assessment but could not displace that temporal focus.
2. The authorities permitted a single success fee, although a two-stage fee was encouraged. A single fee would not generally be justified at the same level as the upper stage of a two-stage fee. The present claims fell outside the category of modest and straightforward claims in Callery v Gray, where 20% had been identified as the maximum in the ordinary case. The contemporaneous risk assessment showed substantial uncertainty about the cause of the accident, conflicting witness evidence, possible involvement of an untraced driver and significant complexity arising from the injuries. The appropriate uplift was therefore 50%, not 100%.
3. Indemnity costs. The solicitors’ letter of 30 April 2003 was not a Part 36 offer, so the Part 36 regime did not apply. The issue fell under the general discretion in CPR 44.3. The defendants’ continued denial of liability was not unreasonable to a high degree or deserving of moral condemnation. Although the case against the first defendant was strong, the evidence left open liability on different bases. Liability costs were therefore to be assessed on the standard basis.
4. The costs of determining these two issues were to form part of the claimants’ liability costs, payable by the first defendant under the settlement order.

Not an appeal. The judgment determined outstanding costs issues following settlement of the liability claim.