Following the case of Belsner -v- CAM, the issue of informed consent is a hot topic and this was examined in the case of SGI Legal LLP -v- Karatysz  EWHC 1608 (QB).
This case involved facts remarkably similar to those in Belsner – the Respondent instructed the Applicant in relation to an RTA which settled in the sum £1,250.00 plus fixed costs of £1,116.00 (including VAT). The Applicant kept back £455.50 – the same being the success fee (25% of basic charges) and the ATE Premium in the sum of £143.00.
According to the Applicant they provided a Client Care booklet setting out the Grade D charging rate of £161.00 p/h.
The Respondent was not happy with the deduction to her damages in relation to the success fee and brought proceedings under the Solicitors Act 1974.
The District Judge stated that a fair allowance for the work would have been 9 hours at £120.00 p/h as opposed to 11 hours at £161.00 p/h claimed.
The District Judge also held that informed consent was relevant in relation to the hourly rate and for the purpose of CPR 46.9(3)(c)(ii) the Solicitors’ costs should be limited to the costs recovered from the Insurer (i.e. fixed costs).
The Applicant appealed to Justice Lavender who held that;
“The issue under CPR 46.9(c)(ii) is whether or not the solicitor told his client what is there set out. That issue concerns what the solicitor said, not whether the client agreed with or approved what the solicitor told him. That issue is materially different from the issue under CPR 46.9(2) or 46.9(3)(a) & (b), which is whether the client agreed or approved something proposed by the solicitor. The focus there is on what the client did, which is why it is relevant to consider whether the client gave informed consent to what was proposed”
Therefore, he concluded the District Judge was wrong to decide the presumption under CPR 446.9(3)(c) arose in the case as consent was irrelevant.
From consideration of the District Judges initial decision, it was also unclear as to why he was of the view that the presumption provided for in CPR 46.9(3)c) led to a limitation decision – notwithstanding the same, Justice Lavender considered the conclusions regarding the reasonableness of the time and rate and found in favour of the Applicant that no refund was to be provided to the Respondent.
For the full judgment, please see here.
If you have any questions regarding this summary case law please contact Karl Robson here