I was delighted to read yesterday morning news of the Court of Appeal’s judgment in Simcoe v Jacuzzi UK Group Plc.
The Master of the Rolls, in a short judgment with which his fellow Lords Justice both agreed, has restored the long established principle that interest on litigation costs runs from the date of the order for assessment, and not the (later) date on which they are quantified.
For the Latin scholars (?!) amongst us, what is known as the incipitur rule was rudely bundled into the cupboard by a decision of his Honour Judge Stewart sitting at Liverpool County Court in November 2010. The case of Gray v Toner has had insurers and other paying parties rejoicing every since.
For me it’s just been another repugnant example of how innocent victims of accidents are put to yet further inconvenience and cost to add insult to injury.
The central argument that provoked Judge Stewart’s decision fifteen months ago was that clients represented under the terms of a conditional fee agreement (“CFA”) or other funding arrangement are not out of pocket because they do not fund the litigation.
Any concerns about the fairness of expecting claimants’ solicitors to bear the financing burden without ultimate reward, to the benefit only of insurers, were dismissed in a short comment I read anticipating Supreme Court involvement. The author says that any loss or expense borne by the solicitors funding the litigation could and should have been covered by a “deferment element attached to the success fee”.
He’s quite right that this can be done - it’s been permissible since the current regime (as amended in 2005) began.
But that portion of the success fee is recoverable by the solicitor from the client, not by the client from the third party. So if that is in place then who’s out of pocket?
Er, that’ll be....the client.
Plainly, the right decision. Thank you my Lords. Keep them coming..