Ghising v Secretary of State for the Home Department

A retrospective success fee under a conditional fee agreement is not contrary to public policy as a matter of principle. Whether it is recoverable depends on the circumstances and the proper assessment of risk when the agreement was entered into, without hindsight. The absence of prejudice to the paying party is relevant but is not necessarily decisive. On appeal from a costs assessment, the court may intervene where the costs judge has erred in law or principle, misunderstood relevant evidence, considered irrelevant evidence, or reached a plainly wrong conclusion.

The claimant successfully participated in a test case concerning entry clearance for adult children of Gurkha veterans. The Secretary of State was ordered to pay his costs. At detailed assessment, Master Simons allowed retrospective recovery of base costs but refused retrospective success fees for work undertaken before the conditional fee agreements were executed.

The claimant appealed that refusal. The central issues were whether the Master had applied the correct approach to risk assessment, whether the absence of prejudice from late notification of the funding arrangements was material, and whether the agreements covered work undertaken before execution.

1. Appeal allowed. The Master’s ruling, rather than comments made during the hearing, was the decision under challenge. Although appropriate deference is owed to a specialist costs judge, the Master had decided a point of principle.
2. Under the approach in Motto v Trafigura [2011] EWCA Civ 1150, the appellate question was whether the Master went wrong on law or principle, misunderstood or relied on irrelevant evidence, or reached a plainly wrong conclusion.
3. Following Birmingham City Council v Forde [2009] EWHC 12 (QB), a retrospective success fee was not prohibited by public policy. Its recoverability was a matter for discretion in the circumstances of the individual case.
4. The relevant risk had to be assessed by reference to the circumstances reasonably appearing when each conditional fee agreement was entered into, without hindsight. The Master was entitled to reject the submission that risk was unchanged, but there was no evidential basis for his conclusion that the risk was materially different. The July estimate of a 60–80 per cent chance of success encompassed the later estimate of 65 per cent, and the respondent’s skeleton argument post-dated the solicitor’s agreement.
5. The presence or absence of prejudice caused by late notification was a relevant factor, but not necessarily a fundamental or decisive one. Its weight was for the decision-maker. The authorities concerning relief from sanctions—The Commissioners for Her Majesty's Revenue and Customs v Blue Sphere Global Limited [2011] EWHC 90217 (Costs), Mishcon de Reya v Caliendo [2015] EWCA Civ 1029 and O’Brien v Shorrock [2015] EWHC 1630 (QB)—were not materially analogous and provided no assistance.
6. The wording of the solicitor’s agreement was capable of covering work undertaken retrospectively and was not ambiguous. A further detailed assessment might therefore be required, to be conducted on the papers if the parties could agree the order and timetable.

• High Court (Queen's Bench Division): The appeal from Master Simons’s costs assessment decision of 6 May 2015 was allowed on the point of principle. A further detailed assessment might be required.