Helen Sellers v Steven Simpkins

Under a conditional fee agreement containing an overall cap on the client’s liability for costs, the cap applies where the solicitor elects to await the outcome of the claim and the client wins. It does not apply where the solicitor elects to claim basic charges, expenses and disbursements before the claim concludes. The election may be made by clear communication in the factual context; delivery of a formally compliant bill is not required to exercise the election. Where the cap applies, the court must identify the best ascertainable figure for costs recoverable from the opponent, allowing credit for sums already paid.

The claimant instructed the defendant under a conditional fee agreement to pursue a personal injury claim. The agreement was a “CFA lite”, limiting the claimant’s liability for costs, net of sums paid by the opponent, to zero per cent of damages. The claimant terminated the retainer before the underlying claim settled. The parties agreed that the remaining preliminary issues were whether the termination limited the defendant’s entitlement and, if so, the appropriate figure.

The defendant had indicated on termination that he would seek payment of costs under the agreement. The central issue was whether he had elected immediate payment or had elected to await the outcome of the claim.

1. The overall cap did not apply. Applying Higgins & Co Lawyers Ltd v Evans [2019] EWHC 2809 (QB), the cap does not operate where the solicitor elects to claim basic charges, expenses and disbursements before the claim has concluded. It applies where the solicitor waits for the outcome and the claim succeeds.
2. The distinction follows from the terms of the agreement. A cap calculated by reference to damages received cannot sensibly govern an entitlement which has crystallised before the underlying claim is concluded. Higgins was not inconsistent with distinguishing between immediate payment and an election to await the result.
3. The defendant’s communications in March 2021 showed that he had exercised the contractual right to require payment of his basic charges, expenses and disbursements without waiting for the claim’s conclusion. A bill complying with section 69 of the Solicitors Act 1974 was not required before the election was made. The factual matrix and the absence of any success fee made it clear that there was no practical advantage in awaiting the outcome.
4. Had a success fee been payable, the communications would not have supported an argument that the defendant had elected to await the outcome.
5. Alternatively, if the cap applied, the appropriate figure would have been the highest costs figure presented to the opponent in the settlement process, £396,296.51, less £41,800 paid directly to counsel, producing £354,496.51. The bill remained subject to detailed assessment.