Costs: Claimant Penalised For Change From Legal Aid Funding to CFA

• Published date: 21 May 2020
• Author: Mr Jonathan Shaw
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation
• Law Firm: Clyde & Co

The Court of Appeal has rejected an appeal from a Claimant seeking to recover a success fee and ATE premium in a clinical negligence case. The Claimant's solicitors had been switched from legal aid funding to a conditional fee agreement (CFA), yet there had been no involvement of the Claimant's litigation friend in making that decision.

This decision was found to be unreasonable by the Court of Appeal, effectively denying the Claimant recovery of a success fee and the after-the-event insurance premium (ATE). The change had not been made because of any tangible benefit to the Claimant, rather that the solicitor had exceeded the legal aid budget, and would be unable to secure an increase.

Background

The Claimant pursued a clinical negligence claim, and first instructed a firm of solicitors in May 2002. In February 2006, the Claimant instructed her second firm of solicitors. Although the claim was initially commenced on a private funded basis, then a CFA with second firm of solicitors, as the firm had a legal aid franchise there was an expectation that the Claimant would apply for legal aid, which was subsequently applied for and a legal aid certificate provided

The Claimant's solicitor made a request for further funding when medical reports were being obtained. The Legal Services Commission (LSC) advised further funding could not be agreed but recommended making a formal request for funding.

The solicitor wrote to the Claimant advising that a letter had been sent to the LSC recommending the certificate be discharged so alternative funding could be arranged. The Claimant was switched from legal aid to a CFA-lite. It was accepted that the Claimant was not given a choice in this.

The Claimant's solicitor appealed two previous decisions whereby the judges had ruled that the success fee and ATE premium were not recoverable.

On first hearing, Master Rowley concluded that "it cannot be a reasonable decision to change a funding simply because no obvious effort has been made to run the case within the original funding agreement". He found that the case had been run "with little or no regard to the certificate limits on the assumption that if it became defended, it would have to convert to a CFA in any event." He did not allow the Claimant to recover the success fee and ATE premium.

On first appeal, Jay J dismissed the Claimant's appeal, upholding the decision of Master Rowley. He found that the "real or operative reason" for the change in funding was that the money...