FKJ v RVT & Ors

When assessing recoverable success fees under a pre-commencement funding arrangement, the court applies the pre-1 April 2013 regime and assesses reasonableness by reference to the facts and circumstances reasonably appearing when each CFA was entered into. Hindsight is excluded.

The relevant question is the objective risk that the legal representative would go wholly or partly unpaid. The amount or complexity of the claim does not itself increase that risk. Staging may reflect increasing litigation risk, but cannot justify a fee unsupported by the underlying risk. A defence and a contested trial may justify increases, whereas issuing proceedings or ordinary disclosure will not necessarily do so.

The claimant brought a misuse of private information claim after private WhatsApp messages were deployed in related Employment Tribunal proceedings. The High Court claim settled shortly before trial under a consent order requiring the defendants to pay the claimant’s costs.

The claimant sought recovery of 100% success fees under three conditional fee agreements entered into in January and April 2019. The defendants contended that the recoverable success fees should be limited to 25%. The issue was the reasonable level of success fees, assessed by reference to the risks reasonably apparent when each CFA was entered into.

1. Applicable regime. The CFAs were pre-commencement funding arrangements. Under CPR 48.1(1), the pre-1 April 2013 funding regime applied. Proportionality under the post-2013 regime was of limited or no relevance. The success fees were to be assessed by reference to reasonableness and the risk of the legal representatives going wholly or partly unpaid.
2. Objective assessment. The court had to consider all the circumstances under CPR 44.4(1), assessing the risks as they reasonably appeared in January and April 2019. The court was not bound by the risk assessments and could consider risks not expressly identified. Subsequent events and litigation conduct could not be used with hindsight.
3. Nature of the risk. The underlying misuse of private information claim was strong because the defendants possessed a large body of highly private information and faced the burden of showing that its use was justified and proportionate. The risk of proving the precise means by which the information had been obtained was distinct from the risk of the claim failing altogether. There remained some risk of defeat or nominal damages, including through arguments concerning credibility, disclosure obligations and the possibility of failing to beat a Part 36 offer.
4. Staging. A staged fee could reflect increased risk, but staging alone could not justify an excessive percentage. A defence could increase risk. The issue of proceedings and ordinary disclosure did not, on these facts, do so.
5. Disposition. The reasonable final-stage success fee, reflecting settlement close to trial after a contested defence, was 50%. The same percentage was recoverable on the fees of Taylor Hampton, Mr Hirst and Ms Page KC.