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Assessment of Additional Liabilities
The court will not assess additional liabilities until the conclusion of proceedings
(or the part of the proceedings which the relevant funding arrangement relates to).
The same goes for commencement of Detailed Assessment proceedings itself. Proceedings
are only considered concluded when the court has finally determined the matters in
issue. There are some exceptions such as where an award for provisional damages has
been made. There are also occasions where, even though the case is continuing, parties
can agree between themselves in writing, or the court can order, that the proceedings
can be treated as concluded.
Costs Practice Direction (CPD) 11.5: In deciding whether the costs claimed are reasonable
and (on a standard basis assessment) proportionate, the court will consider the amount
of any additional liability separately from the base costs.
CPD 11.9: A percentage increase will not be reduced simply on the ground that, when
added to base costs which are reasonable and (where relevant) proportionate, the
total appears disproportionate.
CPD 11.7 - factors and circumstances when the agreement was entered into will be
taken into account.
"Subject to paragraph 17.8(2), when the court is considering the factors to be taken
into account in assessing an additional liability, it will have regard to the facts
and circumstances as they reasonably appeared to the solicitor or counsel when the
funding arrangement was entered into and at the time of any variation of the arrangement."
CPD 11.10 - Level of the insurance premium:
In deciding whether the cost of insurance cover is reasonable, relevant factors to
be taken into account include:
(1) where the insurance cover is not purchased in support of a conditional fee agreement
with a success fee, how its cost compares with the likely cost of funding the case
with a conditional fee agreement with a success fee and supporting insurance cover;
(2) the level and extent of the cover provided;
(3) the availability of any pre-existing insurance cover;
(4) whether any part of the premium would be rebated in the event of early settlement;
(5) the amount of commission payable to the receiving party or his legal representatives
or other agents.
How much would you expect to pay for an insurance premium?
Callery -v- Gray (significant points):
1. The premium was recoverable in costs-only proceedings
2. It was appropriate to have entered into the CFA when the solicitors were instructed.
3. £350 plus IPT was allowed (when the market was still in its early days).
4. The House of Lords dismissed a 'tranche 3' appealing the above.
Claims Direct No. 1  :
1. £1312.50 premium was reduced down to £621.13
2. Deferment of payment of the premium until the end of the case did not constitute
a credit agreement.
Tilby -v- Perfect Pizza 
Deferment of payment of costs was not a credit agreement under the Consumer Credit
TAG (Tranche 2) Premiums - 15th May 2003
2000 - £840 down to £450
2001 - £997.50 (Lloyds) down to £480 (swing)
2001 - £997.50 down to £425
Ashworth -v- Peterborough United Football Club - 10th June 2002 - Master Wright
1. Bespoke premium of £45,937.50
2. Market forces considered. It was unlikely that the premium could have been found
any cheaper with another insurer.
3. The solicitors could show that they had made efforts to find another insurer
and to resolve the matter.
4. The solicitors did not have to disclose the amount of the premium fee only that
they would be seeking to recover it from the other side.
Veronica Pirie -v- Ayling - 18th February 2003
1. The fee for the premium to be paid had been expressed to be 20% of the damages
2. This approach was found to be unreasonable and £367.50 was awarded.
Abrew v Tesco Stores  Master Rogers, SCCO
The Claimant had fallen on dried spaghetti left on the floor of one of the Defendants’
stores, sustaining injury and had brought a successful claim. The case is an example
of how the courts approached assessment of insurance premiums and success fees in
the ‘early days’ of CFA’s. The CFA in this case was entered into back in 2000 not
long after solicitors had begun to recover a success fees and insurance premiums.
The case has now been superseded by cases such as Rogers v Merthyr Tydfil. The case
also look at proportionality in Detailed Assessment costs.
In terms of the proportionality point on Detailed Assessment costs, the court echoed
the words of Lord Justice Latham in Berstein v The Times  EWCA Civ 1739 who
“condemned those who sought make a cottage industry out of satellite litigation”.
Master Rogers decided that the costs of Detailed Assessment were indeed disproportionate
but only because of the approach taken by the Defendants.
Atack –v- Lee
The court are not obliged to consider the solicitor’s risk assessment. The method
of assessing the risk can be disregarded by the costs judge. The costs judge simply
needs to consider the risks as they reasonably appeared to the acting solicitor at
the time the CFA was entered into.
Callery -v- Gray (Tranche 1 & 2) 
1. 60% success fee claimed in a straightforward RTA case. Reduced to 20% maximum.
2. The CFA covers costs-only proceedings.
3. Lord Woolf suggested a 2-stage success fee approach might be suitable.
Eg. where liability is admitted within the protocol period. CPD 11.8(2): "The court
has the power, when considering whether a percentage increase is reasonable, to allow
different percentages for different items of costs or for different periods during
which costs were incurred.
Halloran -v- Delaney 
1. Law Society model CFA covered costs-only proceedings.
2. This case was very simple, settling at £1500 damages and included costs-only
3. 5% success fee awarded in respect of the success fee in costs-only proceedings
in accordance with 11.8(2) above.
11.5 In deciding whether the costs claimed are reasonable and (on a standard basis
assessment) proportionate, the court will consider the amount of any additional liability
separately from the base costs.
11.6 In deciding whether the base costs are reasonable and (if relevant) proportionate
the court will consider the factors set out in rule 44.5.
11.8 (1) In deciding whether a percentage increase is reasonable relevant factors
to be taken into account may include:(a) the risk that the circumstances in which
the costs, fees or expenses would be payable might or might not occur;
(b) the legal representative's liability for any disbursements;
(c) what other methods of financing the costs were available to the receiving party.
(2) The court has the power, when considering whether a percentage increase is reasonable,
to allow different percentages for different items of costs or for different periods
during which costs were incurred.
11.11 Where the court is considering a provision made by a membership organisation,
rule 44.3B(1) (b) provides that any such provision which exceeds the likely cost
to the receiving party of the premium of an insurance policy against the risk of
incurring a liability to pay the costs of other parties to the proceedings is not
recoverable. In such circumstances the court will, when assessing the additional
liability, have regard to the factors set out in paragraph 11.10 above, in addition
to the factors set out in rule 44.5.
KU (a child by her mother and litigation friend PU) v Liverpool City Council 
EWCA Civ 475, 27th April 2005
Recovery of success fees at varying levels during different stages of proceedings.
In original Detailed Assessment hearing a success fee of 100% allowed up to the point
when Defence filed. 5% allowed thereafter on costs to also include costs of Detailed
Assessment. On appeal neither two-stage nor 100% success fee considered appropriate.
Brooke LJ thought 50% to reflect a 2:1 risk. The risk of the matter not being costs
bearing because of it potentially being a Small Claims matter should not be recoverable
between the parties. The CFA did not contractually allow for the success fee to be
altered during the proceedings.
Andre Agassi -v- Robinson
C v W  EWCA Civ 1459
A personal injury matter where liability had been admitted prior to the CFA being
entered into. The question for the Court of Appeal to consider was what success fee
would be appropriate where liability was not a relevant factor in assessing the risks
for the purposes of a success fee.
During the initial assessment of costs a success fee of 70% was allowed. On appeal
this was reduced to 50%. The thrust of the arguments were on the wording of the CFA
giving rise to the success fee and the risks to the solicitors when the CFA was entered
into. The CFA provided that if, on the advice of the solicitors, the client were
to reject a Defendant’s Part 36 offer but fail to beat that offer the Claimant’s
solicitors would waive their costs and success fee from the date of the offer.
The Court of Appeal accepted their was a genuine risk to the solicitors but it was
however a relatively remote risk and reduced the success fee to 20%.
Fixed Success Fees
Nizami v Butt  EWHC 159 (QB)
Following a claim arising from an RTA it was suggested that the Claimants had failed
to conduct adequate BTE enquiries breaching the old 2000 CFA Regulations, therefore
suggesting that the CFA was invalid. The court decided that the retainer had no bearing
on the recoverable costs as the costs recoverable were fixed under CPR 45.9. The
fact that there was a funding arrangement meant that a success fee was recoverable
in addition. The indemnity principle could effectively be overlooked in these cases.
Lamont v Burton
A Claimant who, at Trial, did not beat a Part 36 offer made previously by the Defendants
was still entitled to a 100% success fee because the case had gone to Trial. CPR
Part 44 could not be used to circumvent the provisions of the fixed success Rule
in Part 45. Any amendment would be a matter for the Rules Committee to consider.
Kilby v Gawith  EWCA Civ 812
A client involved in an RTA has BTE but that had no bearing on the success fee which
was prescribed by CPR 45.11(2). There is no discretion on fixed success fees. A claimant
may recover a success fee if he has entered into a funding arrangement. The Defendants
had sought to argue that “may” under 45.11(1) gave the discretion but this interpretation
was not agreed by the Court of Appeal or in the decisions in the courts below. The
principles that had been decided in Nizami and Lamont stood.