News focus: North-west firm hails landmark SC victory on fee recovery

The firm at the heart of a landmark Supreme Court victory for solicitors seeking to recover their fees has hailed the decision as a victory for innovation and a boost for access to justice.

On Wednesday, justices ruled by a 3-2 majority to uphold Bott & Co’s appeal in its fight to recover costs from flight compensation being paid out by airline Ryanair. The court found that the firm was entitled to a lien over clients’ compensation for its costs.

In the lead judgment, Lord Burrows said Bott & Co had provided legal services to its clients for the making of compensation claims for flight cancellations and delays, and Ryanair was not able to avoid paying costs by simply bypassing the solicitors.

The outcome is likely to have a wider impact on small claims, where insurers and other paying parties may have been minded to deal directly with law firm clients and deny them costs.

Burrows said: ‘The vindication of a client’s legal rights, through the making of claims, is more likely to be effective if solicitors know that they have the security of a lien to recover their costs.’

Bott & Co handles thousands of flight delay claims every year on a no win, no fee basis, with a high proportion of them involving Ryanair. Before 2016, the airline would pay compensation into Bott’s client account for the firm to deduct its fees and distribute the remainder to passengers. Then Ryanair changed its practice and began communicating directly with Bott’s clients and paying compensation to them, forcing the firm to pursue its clients for payment.

Bott brought proceedings against Ryanair claiming an equitable lien over the compensation for costs and asking for an injunction restraining Ryanair from paying compensation directly.

Bott had lost in the High Court and Court of Appeal, but successfully argued before the Supreme Court that it contributed significantly to the recovery of compensation. Lady Arden, also finding for the firm, said the work of the solicitors, ‘while inconvenient to Ryanair, is entrepreneurial and clearly results in solicitors providing a service which people find useful’. Arden noted that effective access to justice included ensuring that a person can get advice and was a ‘foremost animating principle’ of the equitable lien.

David Bott, senior partner at Bott & Co, had previously said that his firm provided an innovative, technology-based legal solution for hundreds of thousands of claimants, but that this had effectively been used against it and that Bott had been deprived of costs to which the firm was entitled.

Speaking afterwards, David Bott said: ‘We believe today’s ruling enables innovation to persist, with the law catching up with modern legal services. It is reassuring that the courts acknowledge that access to justice is well served by our activities and that airlines (or any potential defendant) should not interfere in matters where the claimant has chosen legal representation.’

The firm has recovered compensation for 226,000 passengers since 2013 and been forced to issue 101,000 (45%) through the small claims track. It is now entitled to recoup from Ryanair charges which became due on or after 22 September 2016 from successful claimants who had been paid directly in an attempt to deny Bott the opportunity to deduct fees at source.

Rosenblatt Solicitors, which represented Bott & Co, said the ruling would resonate across the legal profession and establish the law over an equitable lien that has existed for more than 200 years.

Partner Anthony Field added: ‘It is important for people without the ability to pay lawyers to get representation. Today’s decision goes a long way to protecting the public and giving them access to good quality properly funded legal advice.’

Ryanair said it welcomed the court’s recognition that the airline had provided a ‘relatively straightforward’ procedure on its website for customers to claim compensation directly without involving a solicitor. The company also pointed to Burrows’ observation that ‘one might therefore say that Bott has been providing no added value to what a reasonably competent customer of Ryanair can sort out for himself or herself without incurring any legal costs’.

The airline added: ‘Ryanair urges customers with valid EU261 compensation claims to submit their claims directly to Ryanair and avoid “claims chaser” firms ...who can deduct over 40% of a £220 claim in fees.’