Solicitor denied permission to deduct costs shortfall from client

BCX v DTA [2021] EWHC

The recent case of BCX v DTA [2021] EWHC B27 is an example of a claim for a shortfall against a protected party.

The claimant (a protected party) settled his claim against the defendant and as such was entitled to recover his reasonable costs from the defendant.

The court approved the damages settlement and also ordered “unless the claimant’s solicitors waive their entitlement to be paid by the claimant such shortfall in the costs recovered inter partes as they may otherwise be entitled to under the terms of their retainer, there be a detailed assessment of the Solicitor/Client costs incurred on behalf of the claimant and of the amount which it is reasonable for the claimant’s solicitors to recover from the claimant in all the circumstances such costs to be assessed on the basis provided for in CPR 46.4 and CPR 46.9”.

The defendant subsequently agreed to pay £330,000.00 in respect of the claimant’s costs and the claimant’s solicitors then sought to recover a sum of around £159,000.00 from the claimant to represent the “shortfall” in profit costs, success fee and ATE premium.

The court had to determine what sum was payable out of the claimant’s damages towards costs and following a detailed assessment of the bill of costs the judge reached the conclusion that the defendant had already paid the sum that it was reasonable to expect the claimant to pay.

On assessment the judge took the view that the fees the client was liable to pay the solicitors (profit costs and disbursements) were £274,859.00 plus 15% success fee £26,850.00 plus the ATE premium of £1932.00. This was nearly £30,000.00 less than the sum agreed by the defendant for costs.

The success fee was reduced to 15% and the ATE premium of £1932.00 was allowed in full.

The outcome of the case therefore was that there was no costs shortfall to be taken from the claimant’s damages and presumably the balance of costs should be repaid to the defendant.

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