Costs recovery lawyers are making 12 times the amount their clients recover as they chase firms for damages deductions, the Court of Appeal heard today.

Opening the long-awaited appeal hearing in Belsner v CAM Legal Services, Benjamin Williams KC said it was a ‘ridiculous sight’ to see challenges for less than £300 in damages taken through the High Court.

The three-day hearing seeks to determine whether Norfolk personal injury firm CAM Legal Services was entitled to claim back unrecovered costs from client Darya Belsner’s damages after advising her on a claim.

Hundreds of similar claims are believed to be waiting on the decision around whether the client gave informed consent, while the court is also likely to provide guidance on the wider issue of costs for contentious and non-contentious business. The Law Society's model conditional fee agreement is also under review pending the outcome of the case. 

Williams said Belsner had ‘absolutely nothing to complain about’ the service she received and indeed she did not raise any issue for some time.

‘The sum paid to the solicitors was less than the reasonable costs of the work they faithfully did,’ he said. ‘The picture would look different, of course, if Miss Belsner had been led to believe that there would be no deduction from her damages and that her solicitors would limit their remuneration to the costs recovered from the defendant. But no-one, least of all Miss Belnser, has ever contended that was the position.’

Williams said that the appeal was really about £295.50 deducted from Belsner and said the cohort of cases were largely about ‘very small sums of money’.

He added: ‘What is driving them is the amount of costs which the clients’ successor solicitors are getting out of them, which in this case were 12 times the amount in contention.’

Master of the rolls Sir Geoffrey Vos suggested to Williams that it ‘seems most unreasonable at first’ that a client might not know what solicitors might deduct from them.

Williams said that judges might seek to offer guidance about future practices where solicitors seek to recoup unrecovered costs, but it was wrong to make any ruling pre-empting that guidance.

‘In terms of future business practices I suspect it would not be controversial at all for there to be an overall cap rather than the statutory cap [applicable in Belsner],’ he added.

‘Clearly [solicitors] have regulatory responsibilities and contractual obligations to give their clients the best possible advice and to conduct a costs benefit analysis… This client has suffered no detriment which merits a judicial remedy. It is not as if [she] was left in a laissez faire world where she had no other protections from a solicitor’s maleficence.’

The three-day hearing continues.

 

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