England and Wales High Court (Senior Courts Costs Office) Decisions

IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE

		Thomas More Building Royal Courts of Justice London, WC2A 2LL
		1 July 2015

Master Rowley:

Introduction

1. This judgment concerns the ability of the claimant and her solicitors to fund her personal injury claim via a Conditional Fee Agreement ("CFA") and After the Event ("ATE") insurance policy without formally discontinuing her existing funding via a Community Legal Services ("CLS") Funding certificate. If the claimant is able to do this, then there is the secondary question of whether it was reasonable for her to make the change.
2. The defendant says that the claimant's solicitors cannot lawfully charge for their services in addition to the remuneration recoverable under the extant CLS certificate. The effect of trying to do so is an inability to recover any costs for the period during which the CFA has been used. If that submission is not accepted, the defendant says that, on the facts of this case, it was unreasonable to jettison the public funding for a CFA in any event.
3. The claimant says that she was entitled to change her method of funding given the costs limitation imposed by the CLS certificate which meant that the solicitors could not continue otherwise. In such circumstances, the further work was not in reality being funded by the CLS certificate and was instead properly funded by the CFA. This argument, according to the claimant, answers both the initial and secondary questions. As a fall back position, if the CLS certificate governed the funding throughout, the claimant says the only aspects that would be vulnerable to the defendant's challenge are the additional liabilities i.e. the success fee and the ATE premium.
4. It appeared that this case might be relevant to the outcome of similar cases where claimants have changed funding from legal aid to CFAs in or about March 2013 i.e. just before the changes in recoverability of success fees and ATE premiums came into force on 1 April 2013. However, it became clear during the course of the hearing that the arguments are very much fact specific and the reasonableness of the decision to change funding here was only coincidentally close to the change in regime.

Chronology

5. The claimant brought a clinical negligence claim against the defendant arising out of an event which occurred on 18 February 2008. The claim was settled by a consent order in January 2014. During the course of the claim, the claimant instructed three firms of solicitors.
6. On 17 March 2008 the claimant instructed Scrivenger Seabrook and parted company with them in August 2009. She then instructed Osborne Morris & Morgan on 15 October 2009 before moving to her current solicitors, Ashton KCJ on 1 April 2011. From 10 July 2008 the claimant had the benefit of a CLS Funding certificate and so was, to use the traditional term, legally aided at all three firms.
7. Owing to limitation, the claimant commenced proceedings in August 2011 and the letter of claim was sent at more or less the same time. The defendant originally denied liability but in July 2012 breach of duty was admitted by the defendant together with at least an element of causation. A consent order was filed on the issue of liability on 30 July 2012.
8. On 12 July 2012 the defendant made an offer to settle the claim in the total sum of £100,000. The defendant then made a Part 36 offer in the increased sum of £150,000 on 15 August 2012. Nine days later, the claimant responded with her own Part 36 offer of £275,000 excluding CRU.
9. In November 2012 the Legal Services Commission ("LSC") refused to increase the funding limitation on the claimant's certificate. Her solicitors attempted to persuade the LSC to change its decision but were unable to do so. Consequently, the claimant and her solicitors entered into a CFA on 25 March 2013 and took out an ATE policy dated the following day. Curiously, counsel's CFA is dated 15 March 2013 and as such pre-dates the solicitors' CFA.
10. On 29 April 2013 the defendant increased its offer to the claimant to £275,000 including CRU. The claimant replied with an offer of £500,000 excluding CRU (having withdrawn her August 2012 offer shortly before entering into the CFA).
11. At a joint settlement meeting in November 2013 the claimant revised her position by making an offer of £325,000 excluding CRU which the defendant accepted three days later and the terms of which eventually became the consent order referred to above in January 2014.

Proceeding without discharging the certificate

12. When the claimant and her solicitors decided to change funding to a CFA and ATE, it would normally follow that the solicitors would ask the LSC to discharge the certificate before an alternative funding arrangement was taken out in its place. It is common ground that no such request was made in this case. The first question I need to decide is whether it is permissible for the claimant and her solicitors to have acted in this way.
13. Section 10 of the Access to Justice Act 1999 states that:

"(1) An individual for whom services are funded by the Commission as part of the Community Legal Service shall not be required to make any payment in respect of the services except where regulations provide."

14. Section 22 of the same Act makes it clear to the legal representative that they are not to seek payment from any source under than the LSC in such circumstances. The case of Merrick v Law Society [2007] EWHC 2997 (Admin) is an example of the solicitor seeking payment privately whilst acting under a certificate. The court considered that the solicitor was guilty of conduct unbefitting the profession stating:

"...solicitors, acting for legally aided clients, are not entitled to look to that client for payment. That is not a complex matter; it is basic; it is also of the first importance to the reputation of the profession in its handling of legal aid work."

15. Mr Mallalieu appeared for the Claimant. Through his diligence he demonstrated that the continued existence of Regulation 64 of the Civil Legal Aid (General) Regulations 1989 (to which Merrick refers) was in some doubt. Whilst it was entirely appropriate for him to seek to put the correct position before me, I do not ultimately think it matters for the purpose of this judgment. If I conclude that the claimant's solicitors have acted in a manner akin to the Merrick case, the provisions of the primary legislation are more than sufficient justification in my view for the consequences for which the defendant contends to flow in any event.
16. Mr Sachdeva, for the defendant, sought to demonstrate that the claimant's solicitors were effectively in the same position as in Merrick. He referred to the matters I have set out and also to the wording of the Legal Aid Handbook which confirmed that any form of "topping up" of fees from the client is not allowed. The Handbook states that "Solicitors and counsel may, of course, charge privately for work carried out before the issue and / or after the discharge of a legal aid certificate." Mr Sachdeva's argument was that there was no discharge of the certificate here and so the claimant's solicitors had fallen foul of the legislation and the guidance.
17. Mr Sachdeva also referred me to the words of Ackner LJ in Littaur v Steggles Palmer [1986] 1 WLR 287 as to the purpose of (a predecessor provision of) sections 10 and 22 of the Access to Justice Act 1999 when he said that the wording was "clearly designed to prevent an abuse being made of the fact that legal aid has been granted. An abuse can take many forms." Entering into a CFA with public funding in place was just such an abuse, according to Mr Sachdeva.
18. I indicated in the hearing that I did not see this case as being one of "topping up." The claimant's solicitors were, at the very least, clear in their own minds that they were using public funding up to the date of the CFA but not thereafter. They would claim a success fee on the later costs if successful and not recover costs if they were unsuccessful. There was no attempt in my view to seek additional payment from the client. If the claimant's solicitors were wrong, then other consequences would flow but there was no element of deception in the manner of, for example, the Merrick case.
19. Mr Sachdeva accepted that a notice of discharge was not a requirement in every case to demonstrate that a client has ceased to have the benefit of legal aid, but in his submission, those exceptions were tightly constrained. There were two categories. First, was the situation where a client becomes a litigant in person, such as in Burridge v Stafford [2000] 1 WLR 927, and so the client's new status allowed the court to infer that she was no longer an assisted person and that the certificate had been discharged.
20. Secondly, where, as in the case of Turner v Plasplugs Ltd [1996] 2 All ER 939, the certificate had been "spent". This would occur if the scope of the work under the certificate had been completed. The case of Turner involved a certificate limited to "obtaining further evidence and thereafter Counsel's Opinion as to merits and quantum, to include settling of proceedings... if Counsel so advises." When proceedings were not only settled by counsel but actually commenced, the claimant found himself outside the scope of the certificate. The Court of Appeal concluded that the work done under the certificate had been exhausted when proceedings were settled and thereafter the claimant was not a legally aided party. The consequence for him was that he was not protected against his opponent's costs under section 17 Legal Aid Act 1988.
21. The defendant's case here is that the claimant does not come within either of these exceptions to the requirement of the certificate being discharged. The claimant has referred to a costs limitation under the certificate as being the driver for change but, even if correct, any such limitation did not render the certificate spent. It was granted to take proceedings against the defendant and the claimant was still well within the scope of the certificate. Stage five costs had been allowed in order to deal with quantum following the entry of judgment as to liability. The fact that the claimant's solicitors took a different view from the LSC as to how much time and expense was required to deal with quantum did not render the certificate spent. There was no suggestion that exceeding the costs limitation automatically ended the client's position as an assisted person, unlike for example the party who becomes a litigant in person. In the absence of a discharge of the certificate, it continued to provide costs protection to the claimant against an adverse costs order. If the claimant's argument was accepted, the client would not know when the costs limitation had been reached and at which point they had lost their costs protection.
22. Mr Mallalieu accepted that a notice of discharge was not requested in this case. Whilst no doubt it would have led to a simpler conclusion if she had done so, Mr Mallalieu's contention was that his client did not need to obtain a notice of discharge. He relied on the cases referred to above regarding certificates becoming discharged by conduct. The client who became a litigant in person was an obvious example. Furthermore, once it was accepted that the court could infer that a certificate could be discharged once it was 'spent', the court needed only to look at the circumstances of the individual case.
23. Mr Mallalieu did not accept that there were only two categories of exception to the need for a formal notice of discharge. He submitted that they were only examples of discharge by conduct. Other situations, such as this one could qualify. The test, according to section 10 was whether the services "are funded by the Commission". If they were not, then the position is as set out in the Legal Aid handbook quotation above, namely that there is no prohibition on a private retainer once a publicly funded retainer had come to an end.
24. The certificate had, as is usually the case, been the subject of a number of costs limitations during the case. By July 2012, the limitation had reached £39,400. The claimant's solicitors applied to increase this figure and in November 2012 it was increased to £43,000. According to the Replies to the Points of Dispute, the extension was sought on the basis that the sum of £39,400 "would not even be sufficient to complete the obtaining of expert reports and expert meetings, let alone provide for any profit costs or any work beyond that stage." The increased amount is said to have been "plainly insufficient even for the immediate next steps. On the 8^th November 2012 the LSC was informed of this. By letter of the 20^th November 2012 the LSC set out the reasons for its decision and confirmed that no further funding would be provided. This was further confirmed on the 1^st February 2013."
25. The Replies then continue:

"On or about the 8^th February 2013 KCJ undertook a review of the file and identified that the present limit on LSC funding would not be sufficient to allow for the Claimant to continue to be represented. It was identified that the work undertaken to date on the Claimant's behalf by the three firms of solicitors involved at LSC rates, was approaching the limitation on the certificate (£43,000) and that the provision of further services to the Claimant would not therefore have the benefit of such funding in light of the LSC's repeated refusal to grant any further extension to the certificate.

On or about the 13^th March 2013 the Claimant was informed that no further LSC funding was available and that KCJ were unable to conclude her case within the certificate. The Claimant was advised that the alternative funding available for the continued provision of services in her case was a CFA."

26. In relation to these matters, Mr Sachdeva pointed out that there was no evidence before the court to demonstrate that the legal aid limit had been exhausted. Mr Mallalieu attempted to amplify the replies by reference to Part 14 of the Bill. On his calculations, the claimant solicitors were about to 'hit the buffers' if they had not already done so. His position was that his client was entitled to take a view about the adequacy of what was allowed by the LSC and unless that conclusion was manifestly wrong, the defendant could not sustain any viable argument.
27. Mr Sachdeva contended that allowing the legally aided party's solicitor's view about the adequacy of a costs limitation to be sufficient to trigger a change of funding absent the discharge of a certificate ran completely contrary to the admonition by the courts in cases such as Merrick of such conduct. The scope of the certificate enabled the solicitors to act on their client's behalf to the assessment of damages if required. They would be able to recover their reasonable and proportionate costs against the defendant notwithstanding the costs limitation being exceeded. Even if the court had been provided with firm evidence of the costs limitation being breached, which it had not, it would still not justify abandoning the CLS certificate.

Discussion

28. I have already set out why I do not think that this is a 'topping up' case where the legally aided party's solicitor seeks to recover more money than he is entitled from the public purse. This case is very much centred on whether a costs limitation in a CLS certificate can be the springboard for a finding that the certificate is spent in the same way as was decided in the cases of Burridge, Turner and Littaur. These cases were dealt with in the 1980s and mid-1990s. They predate the effect of the so-called decoupling of legal aid in 1994. This decoupling occurred when the link between the rates recoverable inter partes and the rates payable by the Legal Aid Board was severed. Consequently a legally aided party's solicitor could legitimately seek a market hourly rate if successful even though limited to lower rates payable by the Legal Aid Board if unsuccessful. This decoupling arose from an ever closer scrutiny of an assisted person's legal fees when they came to be paid out of the legal aid fund.
29. The relevance of this for present purposes relates to the imposition of costs limitations in legal aid certificates as well as the limitations on the scope of the work undertaken. In Boorman v Godfrey [1981] 1 WLR 1100, Donaldson LJ records the claimant's advocate as submitting that

"...a legal aid certificate can be limited in two different ways with quite different consequences. First it can be limited to part of the proceedings....Secondly, it can be limited by reference to the steps or procedures which can be undertaken by the assisted person's legal advisers."

30. Given the date of this decision, it is not surprising that there is no mention of the limitation of a legal aid certificate by the costs that can be incurred under it. The Boorman decision is from the same era as the case of Turner that I have described above. Similarly, in Littaur, the legal aid certificate was limited to the making of an application within proceedings. The application was in fact never made and the assisted person could not seek costs protection.
31. The control of spending under a legal aid certificate has continued by the limitation of the scope of the certificate before the need for an advice from counsel. More recently, this control has been strengthened by the imposition of costs limits on certificates as well. If the solicitor does not recover his fees from an opponent, he will not be able to recover fees, even at legal aid rates from the LSC (now the Legal Aid Agency), to the extent that they exceed any costs limitation. The decoupling provision means that the opponent can take no point in respect of any such limitation in the general course of things. The defendant is able to raise the challenge here because its argument does not rely on the breach of the costs limitation. It is the claimant who says that the limitation is of significance.
32. The determination to guard the legal aid budget by Parliament has also resulted in the prospects of a legally aided party's opponent gaining a payment from the fund steadily dimming. The reported cases such as Littaur and Turner arise from the unassisted party challenging the claim to costs protection by the assisted party. Such cases are rare now and it may well be for this reason that there appear to be no recent decisions which deal with cases where legal aid has been granted more recently. Even the case of Mohammadi v Shellpoint Trustees Ltd [2009] EWHC 1098 (Ch) to which I was referred involved certificates issued in 1990 and finally discharged in 2002. The result is that the issues raised in this case are ones for which, in my view, there is no direct authority.
33. The starting point, it seems to me, is to recognise that there are sound policy reasons for requiring a formal discharge of a legal aid certificate. It gives clarity to the opponent about the ending of the costs protection as well as to the assisted person himself. Should a claim be made on the fund by the solicitor, it allows for precision about the dates within which work can be claimed. The very fact that notice has to be given to the opponent reflects the importance of dealing with the unusual status of the assisted person vis à vis costs. It is not something that should be lightly disregarded.
34. Secondly, it seems to me to be important to recognise that the limitation of costs by the LSC, is purely intended to guard against perceived over payment from the legal aid fund and is not intended to be some form of check to costs claimed between the parties. Despite this, the approach of imposing standard figures multiplied by the number of experts, as here, to reach a seemingly immutable ceiling of costs which might be claimed against the LSC, has the effect of placing the assisted party and their solicitor in a very difficult position.
35. The defendant says that the claimant's solicitors should continue to represent the claimant under the terms of the certificate because its scope is wide enough to do so. This does not seem to me to be an attractive argument for the defendant to pursue. If the costs limitation is reached, the solicitor is then apparently required to act knowing that, if unsuccessful, all future work will be irrecoverable as against either the defendant or the LSC. Unlike a CFA, there would be no scope for a success fee to compensate for the risking of fees. The experts' fees would also be irrecoverable and would, it seems to me, almost inevitably fall at the door of the solicitor who instructed them. Given the risks and lack of any rewards this is an entirely unbalanced agreement in my view. It is redolent of the CFAs with no success fees used by solicitors on The Accident Group ("TAG") panel at the beginning of the century. The solicitors agreed to do so as part of a commercial arrangement with a work provider. It is an arrangement which does not appear to have been repeated elsewhere, at least in personal injury or clinical negligence claims. I do not accept that an assisted party's solicitor on an individual case should reasonably be placed in a similar position.
36. In this case, the solicitor tried very hard to extend the costs limitation under the certificate in order to continue to use it. This included seeking unsuccessfully to utilise an amount of funds equal to those claimed by the previous solicitors to augment the quantum stage. That approach was criticised by the defendant as demonstrating that the limitation was in fact sufficient if it had been used efficiently from the off, but it seems to me to be a point in favour of the claimant's solicitor in attempting to continue to use the public funding that was in place.
37. Having concluded that this was not viable, the solicitor advised the claimant of the alternative of a CFA and ATE insurance, entered into the agreements and notified the defendant of these steps. There was nothing untoward about these actions although, since they occurred shortly before 1 April 2013, no doubt they would always have raised doubts in the defendant's mind. In fact the relevant matters occurred in Autumn 2012 and I accept Mr Mallalieu's description of there being no rush to change funding arrangements in this case.
38. The serving of the N251 Notice of Funding upon the defendant seems to me to be just as determinative of a change in the claimant's status as a notice of change to a litigant in person would have been. In my view, if the claimant had sought to argue that she had the benefit of costs protection after 25 March 2013, she would have been unsuccessful in so doing.
39. In my judgment, where a party has exhausted the costs that can be claimed under a certificate so that it is 'spent', they can in principle establish a discharge by conduct in the same manner as certificates in which all of the work up to a limitation of scope has been carried out. The effect of that discharge is to end the services funded by the LSC and enable a private retainer to fund the remainder of the proceedings.
40. The notification of the new funding arrangement in form N251 satisfies the need for formality in notifying the opponent of the ending of costs protection. Mr Mallalieu sought to persuade me that notification was not necessary in any event but I take the view that it was required to deal with the costs protection aspect.

Was it reasonable to transfer to a CFA?

41. Having come to the conclusion that it is permissible to act as the claimant has done here, it is now necessary to consider whether the certificate was spent and whether the claimant made a reasonable choice in deciding to change from public funding to a CFA and ATE.
42. I have already set out the parties' position regarding the evidence, or lack of it, as to whether the costs limitation of £43,000 had been reached. It is perhaps not surprising that there is no definitive information on this point. The apparent oversight of discharging the certificate in the first place suggests that a relatively simple and broad brush was used to consider the adequacy of the funding available in late 2012 and early 2013.
43. Mr Sachdeva's submission was that I needed to find, as a matter of fact, the precise position as to the costs incurred in order to deal with this issue. I reject that submission. It seems to me that there is no reason why a broader view cannot be taken about the work done and needed to be done when compared with the costs limitation. There have been many cases where a solicitor has decided against the use of BTE funding in a serious case on the basis that its limit of indemnity could not possibly be sufficient to cover the entire case. There has never been any suggestion that the solicitor would have to exhaust that BTE cover before being able reasonably to take that view. It seems to me that the position is the same here. From the passage in the Replies set out above, the solicitor considered that the work still required to be done could not realistically be completed within the figures allowed for by the LSC in July 2012 and increased modestly in November 2012. I agree. My understanding is that the work that did take place up to and including the joint settlement meeting would all fall within stage 5 rather than stage 6 (which relates to the trial and preparation for it.) The work up to settlement can be seen in parts 15 and 16 of the bill.
44. The parties addressed me on the merits and demerits of entering into a CFA rather than using legal aid in accordance with the case law up to and including LXM v Mid Essex Hospital Services NHS Trust [2010] EWHC 90185 (Costs). I do not propose to set out those submissions in any detail because it was clear that the overriding consideration of the claimant and her lawyers in this case was the perceived exhaustion of the legal aid funding and the claimant's only alternative option being a CFA and ATE. The claimant's replies seek to suggest that the impending arrival of the Legal Aid Sentencing and Punishment of Offenders Act 2012 supported the decision but I do not accept that the coming into force of LASPO was relevant in this case.
45. Mr Sachdeva sought to persuade me that the decision to use a CFA was unreasonable given the proximity to settlement and lack of risk at the point at which it was made. I have already said that I do not consider an arrangement akin to a 'TAG' style CFA to be a realistic option for a party to expect his solicitors to use. It is no doubt the case that claims are often successfully concluded in a way which renders the overspend as against the certificate irrelevant. But I do not think this means that a claimant and her solicitor who keep an eye on the costs being incurred and so are aware of the limitation problem should be obliged to continue to use the certificate come what may. Parties are encouraged to consider their legal spend prospectively and, where it is clear that the available public funding is going to be insufficient, a decision to change to another option must be a reasonable step to take. That is the position in this case in my judgment and so I find that the claimant was entitled to transfer to a CFA and ATE arrangement from 25 March 2013.

Quantum Meruit

46. Given my decisions to this point, there is no need for me to determine the position in respect of parts 15 and 16 of the bill if the CFA was ineffective. But as the parties addressed me on the point, and in case I am wrong about the preceding matters I will deal with issue briefly.
47. Mr Sachdeva submitted that the claimant's solicitors had signed the claimant to a private retainer whilst a CLS certificate subsisted and that was contrary to the legislation and case law and so the CFA was unenforceable as a breach of public policy. In the absence of any other retainer for parts 15 and 16 of the bill, and no claim for a quantum meruit, the profit costs for these parts should be disallowed in their entirety.
48. Mr Mallalieu agreed that he did not seek a quantum meruit assessment if his primary position was rejected by me. The effect of deciding that the CLS certificate subsisted would inevitably lead me, on Mr Mallalieu's argument, to the conclusion that the fees were recoverable from the defendant in accordance with that certificate. The fact that no further sums could have been claimed against it did not offend the indemnity principle given the so-called 'decoupling' provisions. At most, the additional liabilities of the success fee and ATE premium might not be recoverable. Whilst he did not abandon them in such circumstances, Mr Mallalieu accepted that they would be difficult to justify.
49. In my judgment, the claimant's position is the correct one. If the CFA was not reasonably chosen, the corollary must be that the CLS certificate simply continued and the only matters at risk are the additional liabilities. Even on the defendant's own case, there was room within the scope of the certificate for the remaining work to be carried out and remunerated as against the defendant following a successful outcome.
50. Mr Sachdeva's argument sought to characterise the claimant's conduct as being unbefitting in the manner described in the Merrick case above, rather than simply unreasonable. As set out at paragraph 18 above, I do not think that the claimant's solicitors conduct in this case can be equated to the 'topping up' considered in Merrick. Absent such unprofessional conduct it seems to me to be clear that parts 15 and 16 of the bill would fall to be assessed on the basis that the work had been done under the CLS certificate.

Level of success fees

51. The final question to be dealt with in this judgment is the level of the success fees claimed by the solicitors and by counsel. The solicitors claim a success fee of 50% from 25 March 2013. Counsel claims 100% from 15 March 2015. There is nothing that occurred between the two dates to explain the marked difference in the risk level that the different success fees connote.
52. I need to consider what was known by the lawyers at the time they entered into their CFAs. Liability had been admitted and judgment entered on liability several months beforehand. The defendant had made a Part 36 Offer of £150,000 plus CRU in August 2012. That offer had been countered by the claimant on 24 August 2012 with a Part 36 Offer for £275,000 plus CRU. That offer was withdrawn on 13 March 2013, more or less immediately before the CFAs were made. Most if not all of the claimant's medical evidence had been obtained and preparations were being made to disclose it and serve the claimant's schedule of loss.
53. Mr Mallalieu submitted that the parties were £125,000 apart based on the Part 36 Offers that had been made. The outstanding offer of the Defendant from August 2012 increased the risk to the claimant because it was possible that no costs whatsoever would be recoverable under the CFA if the defendant's offer was not beaten. At this time the claimant had not seen the defendant's evidence and the defendant's unknown position regarding what was described as 'secondary causation' potentially had a significant impact on the loss of earnings claim which was a large part of the claimant's claim overall. In Mr Mallalieu's submission the risk posed by the outstanding Part 36 Offer should be added to the general risk in quantum only cases outlined by the Court of Appeal in C v W [2008] EWCA Civ 1459. These factors brought the solicitors' assessment of risk within the margin of appreciation required to consider a 50% success fee reasonable.
54. As far as counsel was concerned, Mr Mallalieu conceded nothing on behalf of his client but clearly appreciated he was on stony ground given that counsel did not take any Part 36 risk, unlike the solicitors, yet was seeking twice the success fee for the risks apparent in March 2013.
55. Mr Sachdeva interpreted the withdrawal of the claimant's Part 36 Offer shortly before entering into the CFA as the solicitors and counsel viewing the potential value of the claim at considerably more than £275,000. On that basis the defendant's extant offer was not one which would be considered a real risk. Mr Sachdeva had previously described the later Part 36 Offer by the claimant of £500,000 plus CRU as being unreasonably ambitious and from which point the claimant had had to climb down. Nevertheless it did seem to me that the defendant's categorisation of the state of play in March 2013 was more cogent than the claimant's.
56. I do not think that the claimant or her advisers were concerned by the defendant's offer of £150,000. The risk as to the recovery of costs as well as damages lay in future offers. On the ready reckoner a 50% success fee reflects a prospect of success of 67% or, to put it another way, a 2 to 1 chance of being successful. That does not seem to me to bear any relationship to the risks faced by the claimant. It seems to me that in fact there is no appreciable distinction to be drawn here from the decision in C v W and as a result the success fee should be allowed at 20%.
57. As far as counsel is concerned, the decision in Thornley v MOD [2010] EWHC 2584 (QB) suggests that a nil success fee would be appropriate. Equally the Court of Appeal in Callery v Gray [2001] EWCA Civ 1117 said that no case was without risk. The absence of the Part 36 risk provision in my view reduces the risk by at least half that undertaken by the solicitors. I allow a success fee of 10% in respect of counsel's fees.

Next steps

58. At the hearing, it was said that the defendant might wish to revise its points of dispute given what had been said during the course of the hearing. Subject to any directions required on this front, I think that the case simply needs re-listing for a detailed assessment to deal with the remaining points. If the parties are able to reach agreement on any directions and a time estimate then there is no need for parties to attend the handing down of this judgment.