Costs Case of the Decade

It’s a case of third time lucky as the so-called ‘costs case of the decade’ was heard in the Court of Appeal this week. Previous hearings had been abandoned and postponed for a variety of reasons but Belsner v CAM Legal Services Ltd is currently being heard this week by the master of the rolls, the chancellor of the high court (Lord Justice Flaux) and Lord Justice Nugee.

The client in this case had entered into a retainer which expressly authorised her lawyer to make a deduction from any damages awarded to her in order to obtain any shortfall in costs unrecovered from the other side.   The court is being asked to determine whether the client gave informed consent for her lawyer to deduct unrecovered costs from her damages.  A claim to contest the fees failed in the county court but that decision was reversed on first appeal.

Any decision that costs cannot be deducted out of damages, even in the face of an express contractual authorisation to do so, is potentially devastating for some personal injury lawyers but also to any legal advisers acting on fast track level claims. 

The ruling will have ramifications for many solicitors who require clients to make up any shortfall between costs incurred and those recovered and the decision is expected to include guidance on when legal business can be counted as contentious or non-contentious and what costs can be incurred for each type of work.

Posted on 6 October, 2022 by Ortolan

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