12.5% success fee is fixed

Kilby v Gawith CA 19 May (not yet reported)

A low value road traffic accident case was settled without proceedings being issued. Quantum was agreed and the defendant agreed to pay costs. The claimant had the benefit of BTE insurance but did not use it, signing up for a conditional fee agreement (CFA) instead. The defendant disputed the success fee fixed at 12.5% of the fixed recoverable costs by virtue of CPR 45.11(2). The claimant issued costs proceedings and the defendant contended that the court had a discretion whether or not to allow a success fee and at what level. The defendant accepted that if a success fee was payable, the amount was fixed by Part 45, but argued that the language of the rules was flexible enough to enable the court to disallow a success fee in principle if to allow it would be to allow the recovery of a cost unreasonably incurred. The defendant contended that Sarwar v Alam [2002] 1 WLR 125 was authority that, in cases such as this, it was generally unreasonable to incur additional liabilities where BTE was available. The claimant’s claim for a 12.5% success fee under r45.11 was allowed by the district judge who ruled that he had no discretion to disallow it. An appeal to the circuit judge failed and the defendant obtained permission for a second appeal to the Court of Appeal.