‘A licence to print money’

According to The Lawyer of 6 June, since the decision in U (or KU) v Liverpool City Council (24/ LL p61) insurers have been wringing their hands calling it a licence to print money. Until that decision defendant insurers had been successful in persuading the lower courts that, from the date they admitted liability, the success fee should be dramatically reduced. The Court of Appeal’s decision that the court can neither apply hindsight to assessing a success fee, nor can it impose a two-stage fee where one has not been agreed, means that success fees allowed on assessments will in future be considerably more than previously. Although the Court of Appeal halved the 100% success fee in U v Liverpool City Council the uplift was halved on facts of that particular case and the court did not suggest that that was the appropriate success fee for other similar claims. However, Rob Carter, head of the FOIL Special Costs Group, said that the ruling cuts both ways. ‘It means you can’t, as the defendant, say that we’ve put our hands up at a certain point, admitted liability and the success fee should come right down, and from a claimant’s point of view that’s good. But by the same token, that has been balanced by the Court of Appeal agreeing the uplift at 50% for a slip and trip case.’ He added that it might be a licence to print money, ‘but it isn’t very good currency’.