Plevin v DAS Legal Expenses Insurance Company Ltd

A conditional fee agreement may make the client liable for solicitors’ costs only where its proper construction requires both success in the claim and an inter partes costs order. Contractual interpretation remains objective. Commercial common sense cannot justify departing from natural language merely because the bargain appears imprudent.

Where a generic insurance policy conflicts with a claim-specific schedule, the specific schedule may prevail. Such a contradiction is not necessarily ambiguity attracting the contra proferentem principle. Cover for an appeal may extend to consequential costs assessment proceedings, and cover may continue for remitted proceedings forming part of the original claim.

The claimant pursued a consumer credit claim against Paragon Personal Finance Ltd under a conditional fee agreement with Miller Gardner, backed by after-the-event insurance issued by DAS. The claim was initially dismissed, but appeals resulted in remission to the County Court, where the claimant recovered damages.

The claimant sought declarations concerning the extent of DAS’s cover. DAS sought repayment of sums advanced to Miller Gardner under a forward funding agreement and repayment of insurance premiums. The issues concerned the construction of the conditional fee agreement, the insurance policy and schedules, cover for remitted and costs-assessment proceedings, estoppel, repayment obligations and commission.

1. Conditional fee agreement. Applying the objective approach to construction stated in Arnold v Britton [2015] UKSC 36 and Wood v Capita [2017] UKSC 24, the claimant’s liability for Miller Gardner’s basic charges, disbursements and success fee arose only where she obtained judgment or settled in her favour and also obtained an inter partes costs order. Liability was limited to the amount covered by that order.
2. The court rejected an interpretation based on the perceived desirability of the bargain. Commercial common sense is relevant, but cannot displace the natural meaning of the words merely because one interpretation produces a bad bargain.
3. Insurance cover. The policy and the individual schedules contradicted one another concerning cover for the solicitors’ own basic charges and success fee. The schedule was the claim-specific document and therefore prevailed over the generic policy wording. The contradiction did not require application of contra proferentem. Cover consequently extended to the claimant’s disbursements and the opponent’s costs and disbursements, but not Miller Gardner’s basic fees or success fee.
4. The original conditional fee agreement and policy continued to cover the remitted County Court proceedings because they formed part of the claim against Paragon. The policy also covered costs-assessment proceedings following the County Court trial and the appeals. Costs assessment was part of the litigation process and the references to the trial and appeals did not restrict cover to the hearing itself.
5. Estoppel and funding. Estoppel by convention failed because DAS acted on its own interpretation of the policy rather than a shared assumption. The forward funding agreement did not limit Miller Gardner’s repayment obligation to sums recovered from the opponent. No such limitation was expressed or necessarily implied.
6. Miller Gardner established no entitlement to commission on premiums relating to the appeals. The appeal cover was not a fresh policy for the purposes of the 2012 TOBA. Consequential matters were to be dealt with at a further hearing.