Mr Justice Simon has ruled in Nizami and Kamuluden v Butt (9 February 2006) that in cases falling un...
Mr Justice Simon has ruled in Nizami and Kamuluden v Butt (9 February 2006) that in cases falling under the predictable costs scheme - road traffic accident cases that occurred after 5 October 2003 and settled prior to litigation for a sum not exceeding £10,000 - the receiving party does not have to demonstrate that there is a valid retainer between the solicitor and the client. It is enough that the conditions laid down under the scheme have been complied with.
The paying party raised the issue of whether the claimant's solicitors had complied with regulation 4(2)(c) of the Conditional Fee Agreements Regulations 2000, which requires consideration of whether their client had the benefit of alternative methods of funding the case prior to entering into the conditional fee agreement. The receiving party refused to provide any information as to whether they had examined the motor policy or any household policy for legal expenses insurance.
Senior Costs Judge Hurst and Jason Rowley, sitting as assessors, said the range of fixed costs recoverable under the scheme ranges from £800 to £2550 and that the success fee, fixed at 12.5%, ranges from £100 to £318.75. Mr Justice Simon ruled it was "hardly consonant with the overriding objective that sums of this order should be subject to the sort of scrutiny that could be a matter of course" if he accepted the paying party's argument that there had been a technical breach of the regulations, rendering the CFA unenforceable. It is understood that the paying party has no plans to appeal this judgement.
However, in Robinson v Doselle (Milton Keynes County Court - 19 December 2005), another case where predictable costs applied, District Judge Hickman found a breach of regulation 4(2)(c) meant the fixed costs and success fee had to be assessed at nil. While he gave the receiving party permission to appeal, no appeal has been lodged with the court.
If claimant practitioners argue that the Nizami judgement applies to cases other than under the predictable costs scheme, defendants should resist their arguments and refer them to Sarwar v Alam and Samonini v London General Transport on the requirements of regulation 4(2)(c). Defendants can also point out that Robinson has decided otherwise, although this judgement may hold less weight than the word of Mr Justice Simon in Nizami.
These law reports are contributed by insurance law firm Berrymans Lace Mawer (http://www.blm-law.com).
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