SENIOR COURTS COSTS OFFICE
London, EC4A 1DQ
B e f o r e :
| J N Dairies Limited
|- and -
|(1) Johal Dairies Limited
(2) Gurbir Singh
Mr Simon Browne QC (instructed by Druces LLP) for the First Defendant
Hearing dates: 16th to 18th August 2011
Crown Copyright ©
Master Gordon-Saker :
Any work we carry out or Expenses we incur both before and after the date of the Agreement in relation to the Claim …
The Base Rate for Counsel's fees to which the Uplift for the Uplifted Rate is to be applied is as follows:
(a) as regards all work other than Court appearances, in accordance with his hourly rate applicable to the type of work involved in the Action, currently £650 plus VAT per hour;
(b) as regards refreshers, in accordance with his daily rate for the type of work involved in the Appeal, currently £5,000 plus VAT per day;
(c) subject to paragraph (e) below the Brief for the Appeal will be £80,000 plus VAT and be deemed delivered as of the 2nd of January 2010. This fee will include all work after the 2nd of January. All work prior to this date will be charged for, based on the hourly rate specified in subclause (a) above …
Are the Claimant's solicitors liable to pay retrospective success fees to Counsel?
150. In respectful disagreement with Master Campbell and Master Hurst, I do not regard it as necessary to hold that a retrospective success fee is per se contrary to public policy. There is, in my view, insufficient warrant for effectively precluding solicitor and client from making such an agreement. In some, perhaps many, circumstances a retrospective success fee, or its amount, may be unreasonable, either as between the parties or as between solicitor and client. But this will not always be so. The court has, in my opinion, enough weapons in its armoury, in the form of the criteria applicable on a detailed assessment and the provisions of the Costs Practice Direction and the Practice Direction on Protocols, to disallow or reduce retrospective fees that are unreasonable, as in this case.
89. Although there is no prohibition in the legislation against backdating a success fee, such backdating seems to me to fly in the face of the CFA Regulations and the Civil Procedure Rules. As Mr Morgan has pointed out the solicitors are placed under a strict duty to explain the position to their client, which they did not do until shortly before the CFA was signed. The solicitors do not assume any risks under the CFA until it is signed (although they may well have been at the normal commercial risk of not being paid prior to that point). The solicitors are under no duty to give notice of funding until the CFA has been signed. It is of great importance that an opposing party should be aware of any additional liability as early as possible. The claimant is, to an extent, protected in that the level of the success fee does not have to be disclosed, but, unless and until the defendants are made aware that they are potentially liable for a success fee this may fundamentally affect the way in which they choose to conduct the litigation.
We would add that the mark up of 100% which has been claimed in this case would appear to the Court, provisionally of course, since we have not heard argument on it, to be very greatly excessive, as is the contention that the mark up should be applicable to costs incurred before the Notice of the CFA was given to the Appellant.
The Claimant's submissions
The reasons for my decision
150. … The court has, in my opinion, enough weapons in its armoury, in the form of the criteria applicable on a detailed assessment and the provisions of the Costs Practice Direction and the Practice Direction on Protocols, to disallow or reduce retrospective fees that are unreasonable, as in this case. (emphasis added)