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Do You Charge a Success Fee?

Absolutely, 100%?

As has been reported in Litigation Futures, the issue of the level of success fees being applied by PI law firms is once again in the spotlight.

Master Gordon-Saker, recently speaking at a CJC seminar, called on the Law Society to remind personal injury lawyers of their obligation to undertake individual risk assessments in low-value cases and not just apply their success fee uplift on costs at a standard 100%, albeit capped at not more than 25% of the damages recovered.

There have of course been a number of well reported cases where Claimants have sought to challenge the costs applied by a former solicitor and/or deductions made against damages recovered so these issues

The comments of Master Gordon-Saker also follow hot on the heels of the decision in the Herbert v HH Law Ltd [2018] EWHC 580 (QB) (21 March 2018) in which Mr Justice Soole, sitting in the High Court, ruled that solicitors still need to undertake individual risk assessments before setting the success fee – and that Claimants needed to give their "informed” consent to the success fee proposed.

So, do you apply a standard uplift in respect of your success fee of 100%. If so, you may be leaving yourselves open to challenge if that level of success fee cannot be justified.

You will  recall that the case of Herbert is also important as Soole J upheld that the premium for the Claimants ATE insurance policy was a solicitor’s disbursement, as opposed to a client disbursement. Since the premium must be paid out of damages, the advantages and disadvantages of purchasing an ATE policy must be carefully explained to clients and they must decide whether or not to buy a policy.

Clearly this is a compliance issue on which each of our panel solicitors must make their own decision, but solicitors are obviously free to act/decline to act for clients on whatever terms they feel are sensible.

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