In a ruling this week, the Court of Appeal also ordered the firm to repay £25,000 in costs which they received after the High Court hearing in late 2020.
Judgment in ‘costs case of the decade’ Belsner v CAM Legal Services [2022] EWCA Civ 1387 was handed down last month.
NLJ columnist Dominic Regan said: ‘The crippling costs order resonates with the Appeal Court judgment.
‘Sir Geoffrey Vos MR made it obvious at the hearing that he wanted to see the back of these modestly valued challenges in the High Court. The only slight problem is that the Solicitors Act 1974 says they must be pursued in the High Court.
‘Deputy Costs Judge Colin Campbell has been saying for ages that the Act is hopeless. Perhaps someone will now listen to one who knows.’
Some 900 cases were stayed pending judgment in Belsner, which concerned deductions from damages recovered in a motorcycle crash case brought on a conditional fee basis. On appeal, the court held the deductions were fair and reasonable and did not need to be paid back. Moreover, the solicitors were not obliged to obtain the client’s informed consent to the terms of the conditional fee agreement.
Sir Geoffrey Vos, giving the lead judgment, lamented that 'solicitors seem to be signing up their clients to a costs regime that allows them to charge significantly more than the claim is known in advance to be likely to be worth’.
Giving advice on how solicitors can seek to avoid Belsner-esque trouble, Dr Mark Friston, Hailsham Chambers, told NLJ: ‘Give the client a best estimate of your fees.
‘Give them your best estimate of what you expect to recover from the defendant. Explain, if the case, why your rates exceed the relevant guideline hourly rates and by how much. Tell your client what you charge for work, the cost of which would not be recoverable from an opponent, eg advising your client on costs and funding matters is entirely between you and them.’
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