Oliver v Whipps Cross University Hospital NHS Trust & Anor

When assessing a success fee under a conditional fee agreement, the relevant prospects of success are those reasonably apparent to the solicitor when the agreement is made. A solicitor may enter a conditional fee agreement at an early stage, despite having limited information. That relative lack of information does not justify assuming that the claim has better than even prospects, or converting the mere existence of reasonable grounds for investigation into a 60 per cent assessment. The court must avoid hindsight. A costs judge may adjust the agreed percentage, but an appellate court will intervene where the assessment rests on an erroneous principle.

The claimant appealed against Master Campbell’s order made on 9 October 2008 in a detailed assessment of costs. The Master reduced a 100 per cent success fee under a conditional fee agreement to 67 per cent, reasoning that the solicitors’ decision to investigate the clinical negligence claim showed a 60 per cent prospect of success.

The claim concerned the death of John Oliver after treatment at hospital. The conditional fee agreement was entered into before the medical records and expert evidence had been obtained. The central issue was whether, on the information reasonably available when the agreement was made, the prospects should have been assessed at 50 per cent or 60 per cent.

1. The appeal was allowed. The success fee was restored to 100 per cent.
2. Under [2001] 1 WLR 2112 and paragraph 11.7 of the Practice Direction to CPR 44, the assessment must be based on the facts and circumstances as they reasonably appeared to the solicitor or counsel when the funding arrangement was entered into. Later events and evidence cannot be used to reassess the original prospects.
3. The Master erred in reasoning that, because the solicitors had accepted the claim for investigation, they must have considered it more likely than not to succeed. Acceptance showed only that the claim was not hopeless and had reasonable grounds for investigation. It did not establish a 60 per cent prospect of success.
4. An early conditional fee agreement is permissible. The solicitor’s limited information at that stage is relative ignorance. The claim may later prove stronger than expected, but it may equally prove weaker. Early entry into the agreement therefore does not justify fixing the success fee at the highest level by an assumption favourable to the paying party.
5. The court endorsed the approach in U v Liverpool City Council, [2005] 1 WLR 2657; [2005] EWCA Civ 475, that a single agreed success fee cannot be retrospectively replaced by different percentages for different stages or items of work. The possible use of a staged agreement was therefore irrelevant to the present assessment.
6. The distinction identified in Atack v Lee, [2005] 1 WLR 2643; [2004] EWCA Civ 1712, between appellate disagreement with the exercise of a discretion and an error of principle applied. This was an error of principle, not merely a different assessment within the permissible range.
7. The Master was not bound by the unreported decision in Barham v Athreya. Its criticism of entering a conditional fee agreement at an early stage could not displace the established principle that such an agreement may properly be made then.

1. High Court (Queen’s Bench Division): allowed the appeal from Master Campbell’s order of 9 October 2008 and restored the 100 per cent success fee.