The long-awaited appeal is now stayed until the summer, along with 900 cases eagerly awaiting the outcome

The appeal on the case of Belsner was highly anticipated by many due to the significant impact it could have for low value personal injury claims.  The appeal was due to determine the issue of informed consent in relation to deductions from damages.

The appeal ended abruptly on day two of the hearing and was adjourned to be re-listed before 31 July 2021.

The original claim

Cam Legal Services represented Ms Belsner, under a Conditional Fee Agreement, in respect of a personal injury claim arising out of a road traffic accident. Following the successful conclusion of the claim, Cam Legal Services paid Ms Belsner the amount of damages, minus their fees. Ms Belsner commenced Part 8 proceedings in respect of Cam Legal Service’s costs. A final assessment of the costs was undertaken by District Judge Bellamy pursuant to s.70 of the Solicitors Act 1974.

Ms Belsner appealed District Judge Bellamy’s Order on the basis that the amount allowed on assessment should not, except where the rules of the Court permits, exceed the amount which would have been allowed between party and party in the proceedings, pursuant to s.74(3) of the Solicitors Act 1974.

The District Judge held that the rules of the Court did permit the allowance of a greater amount because CPR46.9(2) applied, in that Cam Legal Services and Ms Belsner had entered into a written agreement which expressly permitted payment to Cam Legal Services of an amount of costs greater than that which the Claimant could have recovered from another party to the proceedings. Ms Belsner contended that it was also a requirement to give informed consent to the agreement, which required Cam Legal Services to giver her “a full and fair exposition of the factors relevant to it”, which the Defendant did not do. The District Judge rejected this contention.

First Appeal

On appeal, Ms Belsner contended it was wrong to permit a greater allowance.

The appeal was heard by Mr Justice Lavender (Belsner v Cam Legal Services Limited [2020] EWHC 2755 (QB)). Mr Justice Lavender concluded that Ms Belsner did not give her informed consent to the agreement and Cam Level Services could not rely on it for the purposes of CPR49(2).

The ramifications of such a decision are huge for those dealing with low value personal injury claims. This would also lead to a finding that the Law Society’s Model CFA would be insufficient to meet the threshold of informed consent.

Mr Justice Lavender made clear, at Paragraph 6 of the Judgment, that this would be a test case. An eye watering £87,715.53 was claimed (by both parties) in their Statements of Costs for dealing with the original appeal. The amount in dispute totals just £385.50.

Cam Legal Services Ltd (Defendant/Appellant) v Belsner (Claimant/Respondent)

The above gave rise to the further appeal brought by the Appellant in the Court of appeal.

On the first day of the appeal, the Master of the Rolls, Lord Justice Vos, suggested that work undertaken under the pre-action protocols was contentious business. The established position is, of course, that work undertaken under the pre-action protocols is non-contentious. Given the implications of such a decision on the Law Society’s standard terms and conditions, which would be found in breach of the fiduciary duty to their clients, the Law Society is intervening in this case.

According to the Association of Costs Lawyers, many Claimant solicitors handling low value personal injury claims use a Contingency Fee Agreement for pre-issue work and a Conditional Fee Agreement once the claim is issued. Finding that pre-action work is contentious business would make the former unlawful and unenforceable.

Written submissions were prepared by the Appellant and the Law Society for the second day. However, at the start of the second day, Lord Justice Vos advised that he considered that the ramifications were more profound than appeared at the start of the case. In light of this, the appeal has been stayed until 31 July 2021 to allow for careful consideration to be given to the issues on appeal and the potentially significant ramifications of any decisions made. The Senior Costs Judge, Andrew Gordon-Saker, is to be invited to sit as an assessor at the adjourned hearing. The adjournment has left around 900 cases stayed, to await the outcome in the summer.

R Costings will be eagerly awaiting the outcome of the Appeal and will report once we have been able to consider the same.

 

Becky Franks – Senior Costs Lawyer

 

 

 

 

 

Return to Knowledge Base