100% Success Fee where trial has commenced.

Last month the High Court heard an Appeal from Master Campbell in relation to yet another case concerning whether a trial had commenced for the purposes of determining whether a 12.5% or 100% Success Fee applied to the costs, due to them being fixed pursuant to CPR 45.16.

In the case of James v Ireland [2015] EWHC 1259 (QB) Mrs Justice Slade took a strict approach to the interpretation.

Interestingly, she sat with Master Haworth whose 2007 decision in Dahele v Thomas Bates & Son Limited [2007] EWCH 90072 (Costs) formed one side of the previously competing arguments about the position. In a nutshell, Master Haworth had found that the matter settled after the time due for the trial to commence with all the parties at Court and therefore ordered a 100% Success Fee. The decision had been the subject of disagreement by HHJ Stewart in Sitapuria v Khan (unreported) who found that unless the trial had actually commenced “by which, in any normal sense of the word, it means that the case has been called on and has at least begun to be opened as a contested hearing” then the Success Fee should be 12.5%.

Despite having Master Haworth as her assessor, Slade J disagreed with the decision of Master Campbell who had effectively followed the Dahele line.

Master Campbell said that in his view the hearing had started because the case had been called on. The matter proceeded by way of an application for an adjournment and Master Campbell felt that effectively the case had been opened at that point. He had therefore allowed the 100% Success Fee.

Slade J found that the Judge had read some of the papers and witnesses were present but Defendant’s Counsel was not ready to proceed. The hearing was put back by consent and then stood out of the list. She found that the fact that the case had been called on, Counsel coming into Court and the Judge had listened to submissions on whether he should rise until next morning did not support a conclusion that the trial on liability had started. There followed a close consideration of the transcript of the proceedings and she found that the fact that the Judge had reserved the liability trial to himself was a strong indication that liability trial had not commenced. There would have been no need to reserve the case to himself if he had already started to hear the trial. He would have conducted an adjourned hearing and so an order reserving the case to himself would not have been necessary.

She found that the 100% increase is payable only when a settlement is reached after the commencement of the final contested hearing and it is not triggered by the commencement of any hearing of whatever nature related to the contested liability hearing. She commented is not unusual for there to be hearings before the start of the contested hearing to deal with matters of evidence and case management matters.

Therefore, following a close consideration of the exact circumstances, she found that the trial had not commenced and that the 12.5% Success Fee should apply.

This is a binding decision and therefore in so far as arguments may be advanced that a settlement on the day of the trial at or after the time that the trial was due to commence should no longer prevail. Obviously, much will depend upon exactly what happens on the day of the trial and this should be carefully considered because the costs involved will in all probability be extremely significant. When considering that the case has been run all the way to trial, the base costs are likely to be fairly large and the difference between 12.5% Success Fee and the 100% Success Fee will obviously be of critical importance.

For now, it would appear that this argument has been decided.