The case, Darya Belsner v CAM Legal Services [2020] EWHC 2755 (QB), was considered so important by the parties that the claimant and defendant spent £52,575 and £35,139, respectively, despite the relatively small sums involved.
It arose from a road traffic accident claim, which was settled for £1,916 damages plus £1,783 fixed costs and disbursements, including VAT. Belsner’s solicitors, CAM, deducted £385 of costs from her compensation.
Belsner challenged this deduction on the basis CPR 46.9(2) required a solicitor to obtain their client’s ‘informed consent’ not just their signature to a written agreement that the client pay greater costs to their solicitor than they could have recovered from another party to the proceedings. She claimed CAM should have given ‘a full and fair exposition of the factors relevant to it’, and had not done so.
Delivering his judgment last week, Mr Justice Lavender held CAM described the potential costs liability only in general terms, and did not spell them out in enough detail to gain ‘informed consent’. Consequently, it was only due costs from Belsner they would have recovered from the insurer, which were £90.
Lavender J said: ‘It does not seem to me that it would have been an unduly onerous burden to require the defendant to make this disclosure…it involved taking the outcome which the defendant had itself assumed for the purposes of its estimate of costs and stating what the recoverable costs might be in that case.’
Mark Carlisle, solicitor at checkmylegalfees.com, which acted for Belsner, said: ‘This ruling will send shockwaves through the no win, no fee personal injury legal industry.
‘It will create millions of claims against them for overcharging and will turn this into the next PPI. For too long legal firms have been using these complicated success fee models that their clients have not had properly explained and do not understand. This was why it was so important that we won this case and set a legal precedent.’
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