The Supreme Court recently looked at various issues concerning the recoverability of additional liabilities between parties in the post-Jackson era, in the case of Plevin v Paragon Personal Finance Ltd [2017] UKSC 23.
In this case proceedings were commenced pre-LASPO, but where the CFA had been varied and assigned and a top up ATE premium obtained post-LASPO in respect of later proceedings in the Court of Appeal and Supreme Court.
Issue 1 – Assignment of CFA
It being common ground that the CFA was in principle assignable, it was held on the facts that both assignments (from Partnership to LLP; from LLP to Limited Company) were valid and intended by the parties.
Issue 2 – Recoverability of Success Fee
It was permissible to enter into a Deed of Variation extending the CFA to cover the conduct of the appeal and further appeal.
The two Deeds of Variation provided for litigation services in relation to the same underlying dispute as the original CFA (albeit at the appellate stages).
This was consistent with the transitional provisions of section 44(6) of LASPO thereby permitting a costs order to include provision for recovery of the success fee.
Issue 3 – Recoverability of ATE premium
The original ATE policy was purchased on 29 October 2008 covering up to and including the trial period. The policy was “topped up” for the appeal to the Court of Appeal and again for the appeal to the Supreme Court.
The top-ups did not give rise to fresh contracts. They were true amendments to the policy which continued in effect subject to the same terms as amended.
The Supreme Court looked at the difference in the wording of the transitional provisions at section 46(3) of LASPO compared to the wording found at s44(6) concerning success fees.
The critical question examined by the Supreme Court was whether the two appeals constituted part of the same “proceedings” as the trial or distinct “proceedings”. The Court reasoned:
If there has been ATE cover in respect of liability for the costs of the trial, the insured is entitled after the commencement date (1 April 2013) to take out further ATE cover for appeals and to include them in his assessable costs under the 1999 costs regime.
What does this mean for paying parties?
Where a CFA and associated insurance policy have been purchased by claimants prior to 1 April 2013, there is a need to consider the costs consequences of bringing or defending any appeals or further proceedings.
This will typically involve considering the litigation risks, the costs benefit analysis and third party costs reserve against the likelihood that the CFA is likely to be varied by deed and any insurance cover ‘topped-up’ to cover the appeal.
As a result, the court is entitled to order the payment of these additional liabilities in any order for costs against the defendant.
Ben Petrecz
The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.