Ungi v Liverpool City Council

LORD JUSTICE BROOKE: In this matter Dyson LJ granted the defendant permission to appeal against an order of Judge Stewart QC in the Liverpool County Court on 15th June 2004 and the claimant has applied to us for an order setting aside that permission on the ground that the defendant is now seeking to take, for the first time in this court, a point that it did not take in either of the courts below.

The history of the matter will be well known to the parties and it is not necessary for me to set it out in this judgment. To take the matter quite shortly, this was a tripping accident involving a girl who fell over a grass verge for which the defendant Council was responsible. The accident was on 6th December 2001. A conditional fee agreement was entered into by her mother six weeks later with a 100 per cent success fee. The Council did not admit liability during the pre-action protocol period. After proceedings were issued they filed a defence in which they admitted they were the owners of the verge and that it was dangerous, but they made no admission as to causation or the amount of damages.

On 22nd May 2003 the court entered judgment for the claimant of its own motion. The Council did not apply to have that judgment set aside, and on 4th August 2003 the court approved a settlement in the sum of £2,500 by way of damages, plus costs to be assessed if not agreed.

In the detailed assessment proceedings, which came before District Judge Humphrey-Roberts on 4th March 2004, the only matters which were in issue was the base costs of the assessment proceedings which the district judge determined - and there has been no subsequent appeal about that - and the amount of the success fee in those proceedings. He took the view that he had power under paragraph 11.8(2) of the Costs Practice Direction to split the success fee up so that the claimant's solicitors should be entitled to 100 per cent success fee at the outset but should only be entitled to a reduced success fee of 5 per cent in the substantive proceedings after the date on which the Council filed its defence, because from that time onwards the risk of the claim failing became much lower. He, therefore, held that this 5 per cent success fee should be carried forward into the detailed assessment proceedings.

The defendant had originally contended on the points of dispute in the assessment proceedings that the success fee should have been 40 per cent throughout, but there was no appeal against the district judge's finding that the 100 per cent success fee was appropriate at the time the CFA was made.

The matter then came before Judge Stewart. There was no issue as to the reasonableness of the 100 per cent success fee at the time the CFA was made, but Judge Stewart held that it was wrong to deal with the matter in the way that the district judge had done. The appropriate occasion on which to assess the risks of the claimant's solicitor bringing an action on the CFA was the date when the CFA was entered into, and the appropriate success fee to be applied to the costs of the assessment proceedings was therefore 100 per cent.

The defendant sought permission to appeal to this court and Dyson LJ granted permission to appeal because he said the core of the judge's reasoning was his interpretation of paragraphs 11.7 and 11.8(2) of the Costs Practice Direction and it was arguable that his approach was wrong. He said that the appeal raised a point of general importance.

This matter has come before us in advance of the substantive appeal because the claimant says that the defendant is seeking to argue the issue in a different way and on a quite new point from the way it was argued before the circuit judge, and that accordingly the appeal is an abuse of process.

Mr Holland has valiantly sought to argue that the claimant's advisers are wrong about that, and in the course of his argument he has made it crystal clear that there are issues here which this court ought to determine as to the interrelation between paragraphs 11.7 and 11.8(2) of the Costs Practice Direction and the way in which a success fee in a case like this ought to be calculated at the outset. In the courts below no attention seems to have been paid to the precise wording of the conditional fee agreement, although we were told by counsel that it was a conditional fee agreement in the Law Society's standard form.

In my judgment, this is a case which ought to stay in this court because it raises important points of practice which call out for the guidance of this court. On the other hand, Mr Holland wishes to deploy arguments in a quite new way from the way in which they were argued before the circuit judge and it would be difficult for this court to say that the circuit judge was wrong in the way that he handled the arguments before him.

At one stage Mr Holland, citing the problems caused by paragraph 7 of his grounds of appeal, which was suggesting that a success fee in the region of 66.6 per cent would have been more appropriate than 100 per cent, sought to resile from that contention, but it appears to me that it is highly desirable for this court to be able to look at the whole picture and not to be restricted by the fact that the reasonableness of the success fee at the outset was not in issue on the appeal.

In all the circumstances, it appears to me that the appropriate direction should be to permit the appeal to continue, but under our powers in CPR 52.9(1) we should impose conditions on which the appeal should be brought, and the conditions should be that the orders for costs in the courts below should remain undisturbed and that the defendant should be liable to pay the claimant's costs limited to solicitor and junior counsel, in the Court of Appeal in a sum which should be limited either by agreement or by an order of the court in default of agreement. If the parties are not able to reach agreement as to the appropriate sum, then they should make written submissions to me and I will determine it on paper.

Mr Williams has helpfully observed that, if we do not direct that the Court of Appeal should deal with these issues by way of re-hearing, we may run into difficulties when we come to assess what the reasonableness of the success fee at the outset should have been. I can see the force of that submission and it is obviously desirable that this court should have a look at the success fee itself rather than remit that issue to the circuit judge, so that in the circumstances of this individual appeal it is in the interests of justice to hold a re-hearing so that the parties will be at liberty to produce evidence before this court as to the appropriateness or otherwise of the 100 per cent success fee. The court will have to understand what the issues were when the solicitor made the CFA, and it may be that there is statistical material in the market place which could be useful for the court to consider when determining that part of the appeal.

LORD JUSTICE THOMAS: I agree.