In what has been hailed the ‘costs case of the decade’ judgement has now been handed down by the master of the rolls, Sir Geoffrey Vos.

It has been reported that Lawyers have won their appeal, which undoubtedly will come as a welcome decision for firms dealing with Personal Injury claims.

Many will recall that the case in question was originally heard in the High Court in October 2020, when it was held that the former client of CAM Legal Services had not given her informed consent to her former personal injury solicitors, before they deducted their fee of £385.80 from her damages.

At first instance, DJ Bellamy decided that the Solicitors were entitled to charge Ms Belsner the only sum which they had ever claimed from her, namely the success fee of £385.50.

On first appeal, Lavender J overturned that decision and decided that the Solicitors were required to obtain the client’s ‘informed consent’, to charge more than the fixed costs recovered from the defendant. 

As a consequence he decided that the solicitors were permitted to charge only the fixed base profit costs of £500 which had been recovered from the defendant’s insurers, plus a success fee of £75.00, and ordered the solicitors to repay the sum of £295.50 (representing the success fee of £385.50 allowed by DJ Bellamy less the £75 plus VAT success fee he had allowed).

CAM Legal Services appealed that decision and the Court of Appeal has decided that:

1.   section 74(3) and CPR Part 46.9(2) did not apply at all to claims brought    through the RTA portal without county court proceedings actually being issued;
2.  the judge was wrong to say that the Solicitors owed the Client fiduciary duties when negotiating their retainer;
3.   the Solicitors were not obliged to obtain the Client’s informed consent to the terms of the CFA on the grounds decided by the judge;
4. the term in the Solicitors’ retainer allowing them to charge the Client more than the costs recoverable from the defendant was not unfair within the meaning of the Consumer Rights Act 2015; and
5.  the court would reconsider the assessment on the correct basis under paragraph 3 of the Solicitors’ (Non-Contentious Business) Remuneration Order 2009 which required the Solicitors’ costs to be “fair and reasonable having regard to all the circumstances of the case”. In doing so, the Court found that the costs actually charged to the Client, in this case, were fair and reasonable.

The appeal from Lavender J was allowed.

It has been reported that if the Court of Appeal had reached a different verdict, it might have affected thousands of similar low-value RTA claims over the past nine years where firms have used similar costs arrangements.

This must therefore come as a welcome victory for lawyers dealing with personal injury work most of whom have already seen major reforms leading to significant reductions in the amount of costs they are able to recover.