Changing times

Sometimes, even now, a decade after the implementation of the Jackson reforms, to most of civil litigation, I go to court to argue for recoverable success fees due under conditional fee agreements, to be awarded on a detailed assessment. Sometimes these relate to success fees in mesothelioma claims, but sometimes these relate to success fees incurred in publication and privacy proceedings.

One of the chestnuts that has been floating about in costs practice for a while now, has been the nature and effect of the publication and privacy proceedings exemption, to the abolition of recoverable liabilities effected by the Legal Aid Sentencing and Punishment of Offenders Act 2012 and in particular where a set of proceedings is brought, which includes for example a personal injury claim. 

It has been asserted by a number of commentators, that these are “mixed” claims, with potentially dire consequences for the unwary privacy lawyer, arising from the unenforceability of conditional fee agreements, the division of ATE insurance premiums and the apportionment of costs. But I am not sure that I agree with that analysis.

Where a conditional fee agreements in publication and privacy proceedings is made before the 6th April 2019, a success fee is recoverable in principle on all the costs claimed in the Bill, under the transitional provisions which relate to LASPO 2012, as further explained below. The “old law” on recoverability applies pursuant to the Legal Aid Sentencing and Punishment of Offenders Act 2012 (Commencement No 13) Order 2018. See further rule 48.2 CPR to like effect.

Nor I would suggest, is the construction affected, where a personal injury claim usually for psychiatric harm consequent upon a tort committed by the defendant added to the mix. It would be a curious consequence if despite the “old law” on recoverability of the success fees applying to this case, the statutory formality requirements were to be the “new law” of the post LASPO requirements.

The enforceability requirements for conditional fee agreements and the recoverability of a success fee payable pursuant to those agreements under a costs Order, derives from statute. Relevant to this question, is Section 58 of the Courts and Legal Services Act 1990 which provided so far as is material:

(1)A conditional fee agreement which satisfies all of the conditions applicable to it by virtue of this section shall not be unenforceable by reason only of its being a conditional fee agreement; but (subject to subsection (5)) any other conditional fee agreement shall be unenforceable.

(2)For the purposes of this section and section 58A—

(a)a conditional fee agreement is an agreement with a person providing advocacy or litigation services which provides for his fees and expenses, or any part of them, to be payable only in specified circumstances; and

(b)a conditional fee agreement provides for a success fee if it provides for the amount of any fees to which it applies to be increased, in specified circumstances, above the amount which would be payable if it were not payable only in specified circumstances and

(c)references to a success fee, in relation to a conditional fee agreement, are to the amount of the increase. 

(3) The following conditions are applicable to every conditional fee agreement—

(a)it must be in writing;

(b)it must not relate to proceedings which cannot be the subject of an enforceable conditional fee agreement; and

(c)it must comply with such requirements (if any) as may be prescribed by the [F122Lord Chancellor].

 (4) The following further conditions are applicable to a conditional fee agreement which provides for a success fee—

(a)it must relate to proceedings of a description specified by order made by the [F122Lord Chancellor];

(b)it must state the percentage by which the amount of the fees which would be payable if it were not a conditional fee agreement is to be increased; and

(c)that percentage must not exceed the percentage specified in relation to the description of proceedings to which the agreement relates by order made by the [F122Lord Chancellor].

It will be noted that under section 58, the enforceability of a conditional fee agreement, was judged by reference to the proceedings that it related to. Within a set of proceedings, there may be one claim, or any number of claims. One cause of action, or multiple causes of action. Section 58A at the material time permitted the recovery of a success fee not by reference to claims, or causes of action, but rather by reference to the costs Order made at the end of proceedings. Section 58A (6) provided:

(6)A costs order made in any proceedings may, subject in the case of court proceedings to rules of court, include provision requiring the payment of any fees payable under a conditional fee agreement which provides for a success fee.

This is significant. At the end of proceedings, a single costs Order will usually be made dealing with the costs of the proceedings; most commonly that the Claimant will have the costs of the proceedings. Section 58A of Courts and Legal Services Act 1990 permits the recovery of a success fee, contained in a CFA by reference to costs incurred in proceedings, not by reference to individual claims and there is accordingly no bar on recovering a success fee on all costs incurred in those proceedings, whether they are characterised as costs of publication and privacy claims, personal injury claims or otherwise, provided the proceedings are “publication and privacy proceedings” for the purposes of the transitional provisions.

Section 44 of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (prohibiting the recovery of success fees in publication and privacy proceedings) only came into force on 6th April 2019 by reason of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (Commencement No 13) Order 2018. Accordingly, even where a claim for personal injury was pursued within those proceedings, the Conditional Fee Agreements would not be subject to articles 4 and 5 of the Conditional Fee Agreements Order 2013 by reason of the saving provision of article 6 of the Conditional Fee Agreements Order 2013 which reads so far as is material as follows:

6.(2) Articles 4 and 5 do not apply to any conditional fee agreement entered into in relation to—

(b)publication and privacy proceedings;

Provided there is one qualifying cause of action, in the proceedings, the proceedings are “publication and privacy proceedings”. This construction is supported by the key concept being proceedings not individual claims. The transitional provision would have been worded otherwise if a different construction was thought appropriate by the draftsman. Instead, it mirrors the wordings of section 58 and 58A. Proceedings are a wider concept than individual claims and may include several claims.

Support also arises from the use of the word “relation” in rule 48.2 CPR and the absence of any limiting words such as “solely” or “wholly and inclusively” by reference to the listed causes of action. There is also an absence of any requirement to divide/apportion a success fee in the statute, the statutory instruments, the rules or the practice direction. (All of these points run with the grain of section 58, that success fees are recoverable in relation to costs of proceedings, not costs of claims.)

By way of example a personal injury claim may be made within publication and privacy proceedings. However, the application of the transitional provisions is determined by whether there are qualifying proceedings, rather than by individual claims. Thus, when someone for example suffers a psychiatric injury by reason of misuse of their private information, for the purposes of the transitional provisions, the correct analysis for the purposes of those transitional provisions is that they are bringing publication and privacy proceedings, within which damages for personal injury will be claimed.

They are not for the purposes of the transitional provisions bringing two claims: for misuse of private information and a claim for personal injury which are treated separately for the purposes of recovery of additional liabilities and the formality requirements for making a Conditional Fee Agreement. In effect the transitional provisions look to see whether they are publication and privacy proceedings, and if there are other or additional claims, they do not alter the categorisation of those proceedings.

The effect of the transitional provisions is that where proceedings stand constituted as publication and privacy proceedings by reason of the inclusion of a qualifying cause of action, the inclusion of further claims including a claim for damages for personal injuries does not prevent the proceedings from remaining publication and privacy proceedings, and therefore does not preclude the recovery of additional liabilities or render the CFAs unenforceable.

Paying parties’ arguments that separate formality requirements and recovery provisions apply to several claims brought by the same claim form, appear to be based on Brown v The Commissioner of Police for the Metropolis [2019] EWCA Civ 1724.  But that case was concerned with a wholly different point: the concept of a mixed claim introduced into the Civil Procedure Rules for the purposes of application/disapplication of QOCS under rule 44.16 CPR. It is not concerned with the transitional provisions at all, which is the key point, still less the recovery of success fees.



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