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Success Fees on Detailed Assessment

August 2006

The House of Lords may hear a third instalment of the Naomi Campbell litigation after their Lordships were asked to make a ruling that success fees should not apply to costs of detailed assessment, or at the very least, be substantially reduced.

In the latest challenge on conditional fee agreements made by media companies, Mirror Group Newspapers (MGN) has petitioned the House of Lords for leave to appeal the decision of the judicial taxing officers in the wake of the last instalment of the Campbell litigation.  This calls for the overturning of the Court of Appeal’s ruling in Ku v Liverpool City Council [2005] EWCA Civ 475, which essentially allows for the same rate of success fee after a “win” has been achieved.

Ms. Campbell’s solicitors, London firm Schillings, sought a 95% success fee on their base profit costs of almost £90,000.00, which related to the costs of the Court of Appeal proceedings.  The success fee was claimed under the same CFA as that which Schillings entered into with Ms Campbell from the outset of the litigation.  The taxing officers held that they were bound by the decision in Ku to allow the same success fee.

London firm Davenport Lyons petitioned that Schillings face little, if any risk in respect of the costs incurred in the last instalment of the Campbell litigation since they had earned the contractual right to be paid for all work done under the CFA by having been successful in the original litigation.  They argued that a success fee of no more than 20%, if any, should be allowed.

Head of legal at MGN said “I have always been of the view that the latest decision is further proof of how the system is designed to “punish” losing defendants in respect of CFA’s in this country.”

The view of Schilling’s partner, Gideon Benaim, was that “it is well established case law that cost assessments form part of the main action and therefore we see no reason why success fees should be treated any differently once the substantive action is over.  Additionally, costs litigation involving CFA’s are generally hard fought and risky, a factor which is no doubt taken into account when conducting risk assessment at the outset”.

Nothing further has been reported in relation to this case, although it will be interesting to see how the House of Lords react to this petition and the decision in Ku which up until now has established the principle that the level of risk is the same for both the substantive and detailed assessment proceedings.

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Date:29 June 2022     Time:10:06:01