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Assigned and varied CFA -Supreme Court Allows Success Fee and ATE premium – Plevin v Paragon Persona

In Plevin v Paragon Personal Finance Limited [2017] UKSC 23, the Supreme Court has upheld the recoverability of both the Claimant’s Solicitors’ success fee and the ‘top up’ after-the-event insurance premium in circumstances where the CFA had been assigned by the Solicitors.

The matter involved a modest claim which resulted in the Claimant being awarded damages of £4,500. The Defendant’s Appeal reached the Supreme Court in November 2014, when it was dismissed. The costs incurred in the Supreme Court were ordered to be paid by the Defendant and were assessed in the SCCO at a total figure of £751,464.00, including £31,379.00 for Solicitors’ success fee and the £531,235.00 for the ATE premium.

Paragon applied for a review of the costs assessment on two grounds

The first ground related to the success fee. The Defendant contended that the CFA was not validly assigned to the two firms who successively

replaced them on the record.

The second ground related to both the success fee and the ATE premium, the basis being that they were not recoverable because they were payable under arrangements made by Mrs Plevin after the revocation of the CFA Regulations post LASPO and thus additional liabilities thereunder were not recoverable between the parties. This point was not so much on the question of assignment but centred upon variations (made in August 2013 and January 2014) to the CFA extending its scope to include the Appeal hearings at the Court of Appeal and in the Supreme Court.

In relation to the first ground, Lord Sumption (giving Judgment for the 4 to 1 majority decision) held that it had no merit and had rightly been dismissed by the Costs Judges.

He noted that it was common ground between the parties that the CFA was assignable in principle. Argument centred on the meaning of “work in progress” in the deed of assignment, which had been transferred to the “new” Solicitors on each assignment. He rejected the Defendant’s contention that the transfer of “…work in progress…” meant only work already done at the transfer date, finding that

“If this were correct, it would mean that the only right of the successor firm was to bill the clients for work done before the transfer date, leaving them with no solicitor to act for them other than the defunct shell of the old firm. This plainly cannot have been intended.

“The point about work in progress is that it is in progress, and clause 2.1 [of the transfer agreement] expressly transfers the work in progress “to the intent that the buyer shall from the transfer date carry on the business as a going concern.””

The Claimant’s consent to the assignment was inferred from her continuing instructions after being advised of the new arrangements.

In relation to the second ground, this too was rejected. The Defendant argued that the variations were new agreements and therefore not covered by the transitional provisions of LASPO for pre-April 2013 agreements. Lord Sumption dismissed this as a “bad point”

LASPO section 44(6) provides that the rule changes do not prevent a costs order including provision in relation to a success fee payable by a person under a conditional fee agreement entered into before the day on which that subsection comes into force if the agreement was entered into specifically for the purposes of the provision of advocacy or litigation services in connection with the matter that is the subject of the proceedings in which the costs order is made.

His interpretation of this was:

“The “matter that is the subject of the proceedings” means the underlying dispute. The two deeds of variation provided for litigation services in relation to the same underlying dispute as the original CFA, albeit at the appellate stages. It follows that unless the effect of the deeds was to discharge the original CFA and replace it with new agreements made at the dates of the deeds, the success fee may properly be included in the costs order”

He found that whether a variation discharges the original agreement depends upon the intention of the parties. He found that at the time of the variations the CFA still subsisted, leaving all the terms unchanged except the additional scope of the agreement. The variations were clearly not a sham but rather a natural way of dealing with further proceedings in the same action.

Similarly, the Court approved the recoverability of the ‘top up’ ATE premiums which were provided for the appellate stages of the claim. Lord Sumption found that:

“The starting point is that as a matter of ordinary language one would say that the proceedings were brought in support of a claim, and were not over until the courts had disposed of that claim one way or the other at whatever level of the judicial hierarchy”

And went on

“The purpose of the transitional provisions of [the Legal Aid, Sentencing and Punishment of Offenders Act], in relation to both success fees and ATE premiums, is to preserve vested rights and expectations arising from the previous law. That purpose would be defeated by a rigid distinction between different stages of the same litigation.

“It may or may not be reasonable to expect an insured party who fails at trial to abandon the fight for want of funding. That will depend mainly on the merits of the appeal. But an insured claimant who succeeds at trial and becomes the respondent to an appeal is locked into the litigation…“.


“Unless he is prepared to forego the fruits of his judgment, which by definition represents his rights unless and until it is set aside, he has no option but to defend the appeal. The topping-up of his ATE policy to cover the appeal is in reality part of the cost of defending what he has won by virtue of being funded under the original policy. The effect, if the top-up premium is not recoverable, would be retrospectively to alter the balance of risks on the basis of which the litigation was begun.”

As noted above, the ruling was a majority ruling, with Lady Hale, Lord Clarke and Lord Carnwath agreeing with the judgment of Lord Sumption and Lord Hodge agreeing with the majority’s conclusions on the assignment of CFAs, but not agreeing that ATE premiums topped up to cover appellate proceedings should be recoverable.

This judgment marks, possibly, the culmination of many years of uncertainty with regard to the assignment of CFA’s, since the rulings in Jenkins and Jones in 2005 and 2016 respectively, however what is clear is that the success enjoyed in this judgment by the receiving party still relies heavily on the specific facts of the circumstances in which the assignment took place, and thus practitioners, whilst perhaps able to rest a little more comfortably this evening, must still take very considerable care when considering whether assignment has been effected, and whether this is the final word on the matter will, of course, remain to be seen.

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