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	England and Wales High Court (Senior Courts Costs Office) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Halloran v Delaney [2002] EWHC 9029 (Costs) (6 September 2002) URL: http://www.bailii.org/ew/cases/EWHC/Costs/2002/9029.html Cite as: [2002] EWHC 9029 (Costs)

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Halloran v Delaney
6 September 2002
The Court of Appeal: Gibson, Brooke, Tuckey LJJ (Sitting With An Assessor)

In this case the Court of Appeal gave guidance as to the quantum of a success fee in costs only proceedings arising out of a modest and straightforward claim for compensation resulting from a traffic accident.

The accident occurred on 22 May 2002. A CFA was entered into on 24 May and the claim was settled in the sum of £1,500 on 6 December 2000. In January 2001 the parties had agreed upon the recoverable base costs (about £1,070 including VAT) but were unable to agree the success fee payable or the sum payable for ATE insurance (claimed at £840). Part 8, costs only, proceedings were commenced and served in July shortly before the Court of Appeal decision in Callery v Gray. In November 2001 an order for detailed assessment of the success fee and insurance premium was made with the Part 8 costs to be costs in that assessment.

In December 2001 the parties reached agreement as to the success fee and insurance premium (a total sum of £585) and, on 1 February 2001, the matter proceeded to a hearing at which the Part 8 costs were assessed. The learned District Judge allowed a total of £1,298.74 including VAT, court fees and a success fee of £203.04 including VAT thereon (20% of the profit costs allowed).

The Defendant obtained permission to appeal limited to the allowance of a success fee on the Part 8 costs and that appeal was leapfrogged to the Court of Appeal.

For the Defendant it was argued that the Law Society model form of agreement did not cover Part 8 costs only proceedings since these were not specified in the contract as required by the Regulations. The defence argued in the alternative that that the learned District Judge was wrong in principle to allow any success fee on the Part 8 costs (there being no risk except the risk of asking for too much) alternatively the success fee thereon should be a nominal 5% for this part of the case.

The Court of Appeal held as follows:

1. The CFA, on its proper construction, embraces the costs only proceedings within the claim for which it provides coverage (approving the decision of Master Hurst on this point in Tilby v Perfect Pizza Ltd February 2002).

2. As a matter of principle it was appropriate for the court to award a success fee on the Part 8 costs and the subsequent costs of assessment.

3. Given the uncertainty in the law of costs recovery which preceded the two judgments in Callery v Gray, the learned District Judge was right to hold that a success fee of 20% in this case was reasonable.

4. In future "Judges concerned with questions relating to recoverability of a success fee in claims as simple as this which are settled before proceedings are commenced should now ordinarily decide to allow an uplift of 5% on the claimant's lawyer's costs (including the costs of any costs only proceedings which are awarded to them) pursuant to their powers contained in CPD 11.8(2) unless persuaded that a higher uplift is appropriate in the particular circumstances of the case. This policy should be adopted in relation to all CFAs, however they are structured, which are entered into on or after 1 August 2001 when both Callery judgments had been published and the main uncertainties about costs recovery had been removed."