Light On Line Ltd & Anor v Zumtobel Lighting Ltd

An insurance certificate complies with CPD 32.5(2)(c) if it shows the premium actually paid or payable at the stage when proceedings concluded. It need not disclose premiums that would have applied at earlier stages. Late service remains a breach requiring consideration under CPR 3.9, but relief may be granted where the substantive information was otherwise available and any prejudice can be managed.

Success fees must be assessed by reference to the realistic overall risk at the date of the conditional fee agreement. The assessment must address liability, causation and the real possibility of losing, rather than a purely theoretical recovery. The size or complexity of a claim does not itself increase the percentage. Counsel’s lower exposure to Part 36 risk may justify a lower fee.

The claimants appealed from three decisions made by Master Haworth during the detailed assessment of costs following settlement of their substantive claim against the defendant. The underlying proceedings concerned defective lighting and associated remedial work. The claim settled for £120,000 plus costs.

The appeal concerned: whether a redacted after-the-event insurance certificate complied with CPD 32.5(2)(c); whether relief from the sanction for late service should be granted; and whether the success fees allowed for the claimants’ solicitors and counsel were reasonable.

1. Appeal allowed. The court applied the appellate standard in CPR 52.11(3). An appeal could succeed where the Costs Judge had erred in law or fact, or had exercised discretion on an erroneous basis.
2. CPD 32.5(2)(c), read in its context, required the certificate to show the amount of the premium paid or payable. The policy contained different premiums, each dependent on the stage at which the case concluded. Only the premium applicable to the actual conclusion of the case was paid or payable. The earlier stage premiums were hypothetical and were not required to be disclosed by the mandatory provision. The Master’s contrary purposive construction was therefore set aside.
3. The certificate was nevertheless served late, contrary to CPR 47.6 and CPD 32.4 and 32.5(2). In applying CPR 3.9, the court had to consider the listed factors and any other relevant circumstances, then stand back and assess the aggregate effect under the overriding objective. Relief was granted. The claimants had made a mistake, much of the substantive information had been supplied earlier, and any prejudice to the defendant could be reduced by disclosure, evidence, adjournment and costs orders. The defendant’s prejudice was outweighed by the loss of a claim worth £60,375.
4. The Master had materially underestimated the litigation risk by treating the case as principally concerning quantification. Liability, causation, contractual relationships and alternative causes of action were disputed. The realistic chance of success at the date of the solicitors’ CFA was assessed at 60%, producing a 67% success fee. A nominal recovery which technically triggered a fee was not a realistic basis for assessment, and claim size or complexity did not itself justify an increased percentage.
5. Counsel’s success fee was properly lower because counsel retained entitlement to standard fees after an unsuccessful Part 36 decision in circumstances where the solicitors would not. The appropriate reduction was 7%, producing a 60% fee. The staging of counsel’s fee did not justify a further reduction.
6. The decisions were set aside and the success fees replaced with 67% for the solicitors and 60% for counsel. Remaining detailed assessment issues, including the insurance premium, and the assessment of the claimants’ appeal costs were remitted to Master Campbell or another Costs Judge. The defendant was ordered to pay the claimants’ appeal costs.

The claimants appealed to the High Court from decisions of Master Haworth, Costs Judge, made during the detailed assessment of costs. The appeal was allowed, the relevant decisions were set aside, and remaining issues were remitted to Master Campbell or another Costs Judge.