A personal injury firm has been ordered to repay a success fee where the protected party had given no informed consent to any deduction.

In AKS v National Farmers Union Mutual Insurance Society Ltd Costs Judge Leonard said that Bolton firm Seth Law should repay around £57,000 wrongly deducted from the damages. However as the firm is in compulsory liquidation the judge doubted whether that would ever be forthcoming.

The judge outlined a series of procedural errors which led to the money being wrongly deducted from the damages of a claimant who had been injured in a 2017 road traffic accident. A settlement of £3.7m was approved by the court in December 2022 and Seth Law applied for an award of 25% as a success fee.

Civil procedure rules state that no firm can claim a success fee from a protected party without it being assessed by the court.

In the judgment, Leonard explained that Seth Law had tried to withdraw the application for assessment as the matter had been ‘dealt with’ by the claimant’s court-appointed deputy. The costs judge had made clear that a deputy does not have that power and listed the matter for directions. Seth Law sent a paralegal to court who argued that approval had already been obtained for the success fee payment as it was at the discretion of the deputy. Leonard stated this this assertion was incorrect.

Seth Law was invited to make further applications or provide extra information, but simply ignored the court’s letter and directions given. Before the relisted assessment hearing, the firm was shut down by the SRA in June 2024 having been placed into compulsory liquidation.

Samira Seth, former sole director and principal solicitor, was fined £7,000 at the Solicitors Disciplinary Tribunal in 2024 and restricted indefinitely from owning or managing a law firm.

The court-appointed deputy was able to produce some correspondence showing how the success fee was calculated. Leonard said there did not appear to have been any real risk assessment, and the success fee in the CFA referred to an ‘entirely generic’ definition of risk.

No complete or comprehensive bill was ever rendered by Seth Law to the claimant, and the costs judge said the firm’s £73,750 success fee ‘raises concern’, adding that it was never contractually entitled to deduct this.

In this case, Leonard said there was no justification for a success fee in excess of 15%. He added: ‘I have seen no evidence that at any time Seth Law discussed with either the claimant or [litigation friend] BXG their reasons for setting a success fee at the level they did. On the contrary, from what I have seen there was no real risk assessment at all until years after the success fee had been set.’

 

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