Lamont v Burton

Where the fixed-success-fee scheme for road traffic accident claims applies, a claim concluding at trial attracts the prescribed 100% increase in solicitors’ fees. The general costs discretion cannot be used directly or indirectly to substitute another percentage.

This remains so when the claimant fails to better a Part 36 offer. The court may reflect that failure by limiting the period for which the claimant recovers costs and by ordering the claimant to pay the defendant’s later costs. It cannot manipulate a proportionate costs order to reduce the prescribed success fee. The scheme deliberately favours certainty over individually tailored assessments and permits departure only in the circumstances expressly provided by the fixed-costs rules.

The claimant recovered damages following a road traffic accident. He had instructed solicitors under a conditional fee agreement. Although the defendant admitted liability and made a Part 36 payment of £1,800, the claimant proceeded to a disposal hearing and recovered £1,774.32.

Deputy District Judge Buckley awarded the claimant his costs up to the last date for accepting the payment without permission, including a 100% success fee. He ordered the claimant to pay the defendant’s later costs. His Honour Judge Tetlow dismissed the defendant’s appeal, holding that the prescribed increase was mandatory.

The defendant appealed to the Court of Appeal. The central issue was whether the general costs discretion permitted the court to reduce the 100% increase prescribed for a claim concluding at trial, particularly where the claimant had failed to better a Part 36 payment.

1. Appeal dismissed. The language of Rule 45.16 was mandatory. Subject to Rule 45.18, the prescribed increase for a road traffic accident claim concluding at trial was 100%. Rule 45.15(1) reinforced that conclusion by referring to the percentage increase which was to be allowed. This language contrasted with provisions which expressly preserved a power to order otherwise.

2. The court retained a wide discretion under Rule 44.3 over whether costs were payable, their amount and the form of the costs order. A successful claimant had no entitlement to costs until the court awarded them, consistently with Donald Campbell v Pollak [1927] AC 732. The court could award only a proportion of costs or limit recovery to a stated period.

3. That general discretion could not circumvent the mandatory fixed-success-fee regime. The court could not directly substitute a 12.5% increase for the prescribed 100%. Nor could it achieve the same result indirectly by selecting a proportion of base costs calculated for the avowed purpose of producing the financial equivalent of a 12.5% increase.

4. Section III of Part 45 established a carefully balanced scheme intended to provide certainty and avoid litigation about the appropriate success fee. As recognised in Nizami v Butt [2006] EWHC 159 (QB), fixed remuneration may over-reward in some cases and under-reward in others, while remaining fair across the scheme as a whole. Departure was permitted only in the circumstances specified by Rule 45.18.

5. A claimant’s failure to better a Part 36 offer did not create an implied exception. The ordinary costs consequences continued to provide a substantial sanction: the claimant could lose entitlement to later base costs and become liable for the defendant’s costs after the relevant acceptance date. Any special reduction of the success fee required amendment by the Rule Committee rather than judicial alteration of the existing rules.

1. Court of Appeal (Civil Division): The defendant’s appeal was dismissed. The 100% success fee prescribed for a claim concluding at trial could not be reduced through the general costs discretion.

2. Altrincham County Court, His Honour Judge Tetlow: The defendant’s first appeal was dismissed. The judge held that the language of Rule 45.16 was clear and mandatory.

3. Altrincham County Court, Deputy District Judge Buckley: The claimant received costs up to the final date for accepting the Part 36 payment without permission, including a 100% success fee. The claimant was ordered to pay the defendant’s costs incurred thereafter.