Costs Flashcards
What is the indemntity principle?
The defendant will never pay more than the claimant would have to pay.
For example, say C has been awared £100,000 settlement. C was funded by a DBA set at 20% and the solicitors costs incurred were £40,000. The defendant will only have to pay £20,000 costs because that is the maximum the claimant would have to pay.
This is because the C is limited to £20,000 (20% of £1000 under the DBA) - The maximum D must pay for costs is this figure.
C has accepted £400,000 settlement
The claim is funded by a DBA set at 20%
Cs solicitor has incurred £40,000 costs
What is the maximum amount of costs the Defendant must pay?
£80,000
This is because the DBA means C only pays 20% of the damages recieved
20% of £400,000 = £80,000
The idemnity principle means D only pays a much as C would.
C accepted £50,000 settlement
The claim was funded by a CFA set at 20%
Costs incurred amount to £30,000
What is the amount of the success fee Cs solicitor can claim?
The success fee is £6,000
20% of £30,000 = £6,000
C would pay £36,000 to their solicitor (£30,000 costs + £6,000 Success Fee)
What is the maximum percentage of damages that can be charged under a DBA (not clinical negligence or PI)
50%
What is the maximum percentage of damages that can be charged under a DBA for a clincial negligence and personal injury claim?
25 %
C has a DBA with her solicitor which provides for the solicitor to be paid 50% of the damages in the event the claim succeeds.
The claimant is awarded £120,000 at trial
The solicitor’s fees recoverable from the other side, calculated on the basis of a reasonable hourly rate, are £20,000.
What sum may the solicitor charge?
£60,000
The solicitor is entitled to 50% of the damages. 50% of £120,000 is £60,000.
Unlike a conditional fee agreement, with a DBA, if the case is successful, the solicitor will be paid a proportion of the damages awarded to the client by way of a remedy, rather than getting their charges plus a success fee, so £80,000 is wrong
With a DBA does the solicitor get their charges on top of the success fee?
No
Unlike a conditional fee agreement, if the case is successful, the solicitor will be paid a proportion of the damages awarded rather than getting their charges plus a success fee
A claim for damages for breach of contract is settled on terms that the defendant must pay the claimant damages of £50,000 together with the claimant’s legal costs
The claimant has a written conditional fee agreement (CFA) with her solicitor which provided for a success fee of 80% of the fees charged by the firm.
The solicitor has calculated their professional fees at £20,000
What sum may the solicitor charge the client for their professional fees, net of VAT?
£36,000
The success fee is 80%.
80% of £20,000 is £16,000.
This can be charged on top of the ‘normal’ fee of £20,000. So the total charge is £36,000.
