Costs run from date of costs order where claimant is CFA-funded
Costs run from the date of the costs order even where the claimant is funded by a conditional fee agreement (CFA) and not from the date the sum is formally agreed, the Court of Appeal ruled last week.
In Simcoe v Jacuzzi UK Group Plc [2012] EWCA Civ 137, the parties were divided over the question of the date from which interest on costs should run on an award of costs to the claimant, and whether the fact the claimant was funded by a CFA gave the judge reason to order otherwise.
The defendant argued that interest should run from the later date on which the sum of the costs was formally agreed.
The court held in favour of the claimants, finding that part of CPR 40.8 is ultra vires in the county court and, until that discrepancy is resolved, a judge in the county court has no discretion to order otherwise. In the county court and the High Court, interest runs from the date of the costs order.
The court also held that the fact the claimant is on a CFA and is therefore not out-of-pocket as a result of the case is not a good reason to order otherwise.
Writing in the March issue of the Civil Costs Newsletter, Roger Mallalieu of 4 New Square, who represented the claimant, says: “The judgment will be good news for claimant solicitors.
“Interest has long provided an annual source of income and has been part of the calculations on which many financial models have been based. In these straitened times, where solicitors acting on CFAs are already facing many changes and strains on their business models, it would have been sorely missed.”
Lord Neuberger, Master of the Rolls, concluded his judgment by criticising the fact it costs the claimant nearly £75,000 to pursue a “relatively minor and straightforward” personal injury case for £12,750 damages.
“Unless this is an exceptional case, the fact that, without even incurring the cost of a trial, it cost the claimant nearly six times as much to pursue the claim as it was actually worth suggests that something is out of kilter in at least some parts of the civil justice system,” he said.
Simcoe was the appeal against Judge Stewart QC’s judgment in Gray v Toner at Liverpool County Court in November 2010.
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