Plevin v Paragon Personal Finance Limited

A pre-commencement conditional fee agreement remains within the transitional protection of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 when it is later varied to cover an appeal concerning the same underlying dispute. The result differs only where the parties intended to extinguish and replace the original agreement.

For the corresponding protection of after-the-event insurance, “proceedings” ordinarily encompasses the action at every level of the judicial hierarchy. Pre-commencement trial cover may therefore be extended after commencement to an appeal, with the additional premium remaining recoverable under the former costs regime. The distinct treatment of trial and appellate proceedings when awarding and assessing costs does not determine the meaning of “proceedings” in this transitional context.

In the substantive proceedings, the Supreme Court dismissed Paragon’s appeal in Plevin v Paragon Personal Finance Limited [2014] UKSC 61 and ordered it to pay Mrs Plevin’s costs. Those costs were assessed at £751,463.84, including a conditional fee agreement success fee and a substantial after-the-event insurance premium.

Paragon applied under rule 53 of the Supreme Court Rules 2009 for review of the assessment. It argued that the conditional fee agreement had not been validly transferred between successive forms of Mrs Plevin’s solicitors’ practice. It further argued that post-commencement deeds extending the agreement, and insurance top-ups covering the Court of Appeal and Supreme Court stages, fell outside the transitional provisions of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

The central questions were whether the agreement remained effective after the business transfers, whether its appellate extensions were variations or replacement agreements, and whether trial and appellate stages were the same “proceedings” for the insurance saving.

1. Disposition. By a majority of four to one, the Supreme Court dismissed Paragon’s application for review and confirmed the costs assessment. Lord Sumption gave the majority judgment, with which Lady Hale, Lord Clarke and Lord Carnwath agreed.

2. Transfer of the retainer. The conditional fee agreement was effectively transferred through the successive reorganisations of the solicitors’ practice. A transfer of “work in progress”, intended to enable the buyer to carry on the business, encompassed the continuing conduct of unfinished client matters. It was not confined to a right to charge for work already completed. In any event, each successor informed Mrs Plevin that it would continue acting on the same terms, and she assented by continuing to instruct it. Lord Hodge agreed on this issue.

3. Success fee. For section 44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the “matter that is the subject of the proceedings” was the underlying dispute, including its appellate stages. Whether a later instrument varies an existing contract or extinguishes and replaces it depends on the parties’ intention. Applying Morris v Baron & Co [1918] AC 1, a complete extinction of the original contract had to be manifest. The deeds merely extended the subsisting agreement’s coverage and adjusted the success fee. They were genuine variations, not artificial devices, and the success fee remained recoverable.

4. After-the-event insurance. “Proceedings” is neither defined by the legislation nor a term of art. Its meaning depends on statutory context and purpose. Although trial and successive appeals are treated as distinct proceedings when costs are awarded and assessed, those authorities addressed a different context. In ordinary language, an action continues until the claim has been finally disposed of at whatever judicial level.

5. Section 46(3) was intended to preserve rights and expectations arising under the former costs regime. Denying recovery for appellate top-ups would retrospectively alter the balance of risks on which insured litigation began, particularly where a successful claimant had to defend an appeal. Pre-commencement trial cover therefore permitted post-commencement appellate top-ups whose premiums remained assessable under the former regime.

6. Dissent. Lord Hodge considered that sections 44(6) and 46(3) protected only contractual rights and expectations existing before commencement. On that construction, later amendments and top-ups were protected only if the original agreement or policy already covered the relevant appellate proceedings. He would have allowed Paragon’s challenge on the transitional-protection issue.

1. United Kingdom Supreme Court: In Plevin v Paragon Personal Finance Limited [2017] UKSC 23 , the court dismissed the rule 53 review application by a majority and confirmed the costs assessment.

2. Supreme Court costs assessment: Master O’Hare and Mrs Registrar di Mambro assessed the costs on 5 February 2015. The present court upheld that assessment.

3. United Kingdom Supreme Court: In the substantive appeal, Plevin v Paragon Personal Finance Limited [2014] UKSC 61 , the court dismissed Paragon’s appeal and ordered it to pay Mrs Plevin’s costs.

4. Court of Appeal: In [2013] EWCA Civ 1658 , the court allowed Mrs Plevin’s appeal from the dismissal of her claim and granted permission to appeal to the Supreme Court.

5. Trial court: The trial judge dismissed Mrs Plevin’s claim. No citation is stated.