A leading personal injury firm has denied any suggestion of artificially inflating costs after being named and heavily criticised in a judgment.
In SJ (a minor suing by his mother and Litigation Friend AJ) v DGJ Tanner t/a Sopley Farm District Judge Lumb said a ‘considerable’ amount of duplication of work could be described as ‘costs padding’. He allowed the full £900 success fee to be deducted but said it was concerning how the claimant solicitors, north west firm Express Solicitors, seemed to know at the time of instruction that it would deduct the maximum 25% from the client's damages.
‘At that stage, [Express representative] Vishaal Anand could not have known whether or not the 25% cap would be reached,’ said the judge. ‘To express the success fee as automatically 25% of the damages would be an unlawful contingency fee.’
In a strongly worded statement following publication of the judgment, Express chief executive James Maxey questioned why there was concern that deductions exceeded what he described as ‘pitifully low’ fixed costs. ‘I am not aware of any solicitors who can process this type of claim within the fixed costs regime at a profit and run a viable business and give high quality service to clients,’ said Maxey.
‘What we do in common with many other solicitors is confirm the maximum amount by way of a percentage deduction that clients will ever have to pay, so that they know that the bulk of their compensation is safe and will pay at most a certain percentage regardless of how much work we do. We offer an effectively unlimited amount of work to claimants if they need for example more time to have things re-explained to them or to go over things. This case is an example of where an awful lot of work was done but the contract limited the total charges to the client to an amount which ultimately the judge approved.’
He added that the firm had campaigned in vain to stop the government shifting the burden for success fees and after the event insurance onto claimants.
In the underlying claim, the firm had represented a three-year-old injured at the defendant’s premises. Her mother acted as litigation friend and the claim for damages for personal injuries was settled between the parties for £3,600.
Express’ incurred costs were claimed at almost £30,000 which included 89.6 hours’ work purportedly done by 14 different fee earners all operating at higher rates than the guideline hourly rates for Manchester.
The district judge said it appeared from this costs bill that the firm was prepared to undertake tens of thousands of pounds worth of work for which it was not going to be paid. The suspicion, he went on, was that costs were ‘artificially inflated’ to ensure that they were high enough to be able to claim the 25%.
He added: ‘Given the huge level of costs said to have been incurred this would have operated as a powerful incentive to the client to see the case through to the end with Express Solicitors and effectively trapped her into doing so.
‘In that event, that process might have attracted the attention of the Solicitors Regulatory Authority and any solicitor operating such terms of business may be wise to exercise caution in doing so.’
Maxey said in response he was ‘entirely confident’ that the firm offers good value to claimants and is clear about charges and all of the contractual details. We go through that orally and in writing with clients and inform them regularly throughout their case,’ he added. ‘My understanding is that there is no complaint here at all from the litigation friend in this case.’
