10.12.07: Sitapuria v Khan

Success fees and trial day settlements

 

Facts:

 

The claimant, who had signed a CFA, issued proceedings in an RTA claim. The case settled at the door of the court, on the day of trial, but before the case had been called on. The predictable costs regime of CPR Part 45 Section 3 applied. This provides that both solicitors and counsel should receive a 100% success fee if the "claim concludes at trial". For solicitors the success fee is 12.5% if the claim concludes before a trial has commenced. For counsel there is an intermediate success fee of 75% payable "if the claim concludes 21 days or less before the date fixed for the commencement of trial".

 

In Dahele v Thomas Bates and Son (SCCO 17.4.07, Master Haworth), it had been held, in a case which was identical in relevant respects, that the 100% success fee was payable for both solicitors and counsel if the case settled on the day of trial. This was mainly because he held that, if it were not so, there would be a lacuna in the rules in respect of counsel's success fees since a settlement on the day of trial would fall outside the criteria for the 75% success fee and, unless a settlement on the day of trial fell within the 100% criteria, would not be governed by the rules at all. The claimant repeated this argument before Judge Stewart.

 

Held:

 

(1) The argument in Dahele was rejected. The criteria for counsel's 75% success fee simply determined the starting point of the period in which counsel was entitled to 75%, not the end point. In those circumstances there was no lacuna in the rules and they should be given their ordinary meaning.

 

(2) Solicitors were entitled to 12.5% and counsel to 75% if a case settled on the day of trial but before it has been opened.