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Home > ATE Caselaw > Plevin (Respondent) v Paragon Personal Finance Limited (Appellant) (2017) appeal from (2013)

Plevin (Respondent) v Paragon Personal Finance Limited (Appellant) (2017) appeal from (2013)

Plevin (Respondent) v Paragon Personal Finance Limited (Appellant) (2017) appeal from (2013)

On appeal from [2013] EWCA Civ 1658

Recovery of a pre-LASPO success fee and After-the-Event (ATE) premium.

Background:

This judgment relates to a review of the costs assessment where the Respondent’s solicitors were acting under a conditional fee agreement (“CFA”) with After the Event insurance (“ATE”) cover.

The Respondents CFA and insurance were initially agreed in 2008 when the claim was first commenced, but the CFA was assigned and the After the Event insurance cover was topped up twice after the 1st April 2013 to deal with the appeals to the Court of Appeal and then Supreme Court.

The Issues:

The Supreme Court had to consider the recoverability of both a success fee under a CFA and the ATE insurance premium depended on the costs regime which was, subject to transitional provisions, brought to an end on 1st April 2013 by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”), specifically whether the main appeal and proceedings in the Supreme Court were the same proceedings as those commenced by the respondent in 2009.

The Appellant (and Defendant in the main proceedings) had argued that these variations were in effect new CFAs and covered by the transitional provisions of LASPO, therefore the success fee and ATE premium for the proceedings after the 1st April 2013 should not be recoverable.

It is important to note however, that both sides had agreed a CFA could be assigned in principle. The central  issue the Court had to decide therefore was the meaning of 'Work In Progress' was under this particular CFA.

Held:

The Supreme Court, by a majority of 4 to 1, upheld the costs assessment of the costs officers and allowed the recovery of a pre-LASPO success fee and After-the-Event (ATE) premium where the conditional fee agreement (CFA) and insurance had to be extended after 1 April 2013 to cover appeals.

Firstly, as to the CFA, it was held that this was correctly assigned irrespective of the reorganisation of the respondent’s solicitors.

When considering recoverability of the ATE premium, the Court held that this turned on the meaning of LASPO, s 46(3), which referred to an insurance policy “in relation to the proceedings”. As a matter of ordinary language, one would say that the proceedings were brought in support of a claim and were not over until the courts had fully disposed of that claim.

Lord Sumption said:

The purpose of the transitional provisions of LASPO, in relation to both success fees and ATE premiums, is to preserve vested rights and expectations arising from the previous law. That purpose would be defeated by a rigid distinction between different stages of the same litigation …. The topping-up of his ATE policy to cover the appeal is in reality part of the cost of defending what he has won by virtue of being funded under the original policy …… The effect, if the top-up premium is not recoverable, would be retrospectively to alter the balance of risks on the basis of which the litigation was begun.”


A significant ruling then on the Act’s transitional provisions, the purpose of which was to “preserve vested rights and expectations arising from the previous law”.

Comment:

So the purpose of the transitional provisions of LASPO was to preserve rights and expectations vested under the previous law. The Supreme Court acknowledged that this would be defeated by a “rigid distinction between different stages of the same litigation”, quite plainly in this regard, both pre and post LASPO, and in consideration to the appeals. It was the same litigation, not entirely separate litigation at the different stages.

As a broker for After the Event Insurance policies, this is a helpful decision and clarifies that the proceedings were the same for the purpose of recoverability of the ATE premium.

There will be further argument in the courts as to whether CFA’s can be validly assigned from one law firm to another is to be dealt with by the Court of Appeal, it has been confirmed that the defendants appeal in Budana v Leeds Teaching Hospitals NHS Trust has been leapfrogged to the Court of Appeal.

Much more important for Claimants was the very positive news on top up ATEs and extending your CFAs to cover appeals.

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