This is an appeal from Master… assessed C’s solicitor’s success fee under the conditional fee agreement (CFA) at 50%. C submits that the Master ought to have assessed the success fee at 80%. [1]
C instructed solicitors and entered into a conditional fee agreement with them… dated 3 December 2012…staged success fee [7]
From the authorities the following can be said:
i) When the Court assesses the reasonableness of the success fee it must have regard to the facts and circumstances as they reasonably appeared at the time the CFA was entered into and not with any hindsight.
ii) The solicitor’s assessment of the risk of the litigation should be useful in revealing the thought processes of the risks. It is a matter for the Court to consider the matter from the standpoint of a reasonably careful solicitor, assessing the risk on what was known at the time of entering the CFA.
iii) The logic in a two-stage success fee is based on whether the other party is not prepared to settle, or not prepared to settle on reasonable terms, such that there is a serious defence. There is no set point for the triggering of a stage in a staged success fee.
iv) The value/complexity of the litigation does not increase the risk of losing, though there may be a higher number of pitfalls in such cases. It is difficult to assess the risk of beating a part 36 offer, but the Courts have upheld 20%-25% success fees in such circumstances.
v) A staged fee agreement does not always justify a higher success fee closer to trial. The question is what was the level of risk justifying the success fee at the time the CFA was signed.
vi) It is open to C to choose the date of staging. He must be able to justify the percentage uplift. If he elects an early trigger for a higher second stage success fee, he must be in a position to justify the higher risk of non-recovery of fees at an earlier stage than if the second stage were only reached at or shortly before trial. It is not therefore the trigger point which is the principal basis for determining reasonableness, but whether the success fee is set at such a level which is reasonable in the light of non-recovery of costs anticipated at the date of agreeing the CFA. [25]
the appeal is dismissed[59]
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