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I'm the Plaintiff in a civil case. The Opponent has made a non-Part 36 offer of an all-inclusive settlement.

I have a conditional fee agreement (CFA) with my solicitor. The Client Care Letter (CCL) has a section,

Costs you are liable to pay if you win the case

Our base costs [... and a] success fee of 25% of base costs.

My solicitor says the base fee now stands at about 80% of the offer. Adding 25% of that 80% (i.e. 20% of the total) would bring the base fee to 100% of the offer.

On the other hand, the CCL clarifies that

To provide as much certainty as possible, but subject to you following all advice given and complying with all the terms of our agreement, you will not receive less than 75% of the compensation received from the Opponent.

On that basis, it would seem the offer should be split 75-25 in my favour.

On the third hand, the solicitor proposed to me in a phone call that we split the offer 50-50, and has now emailed me saying that if I accept the offer I would get 37.5%. I think the reasoning is that, since we would be settling rather than proceeding to trial, the division of the winnings is back on the table and, if we go 50-50, the 25% success fee then comes out of my half (50% of the total minus 25% of that 50% leaves 37.5%).

For my solicitor's position to be consistent with the CCL, I think the word 'compensation' has to be interpreted to exclude the solicitor's fee. Is that a reasonable interpretation?

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    Seems to be a request for legal advice.
    – George White
    Dec 20, 2022 at 3:53
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    @GeorgeWhite Meaning not suitable for the site?
    – mjc
    Dec 20, 2022 at 4:14
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    Dec 20, 2022 at 10:51
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I think the word 'compensation' has to be interpreted to exclude the solicitor's fee. Is that a reasonable interpretation?

No. It appears that the solicitor is trying to de facto amend the agreement in a way that places him in a more profitable position. I'm assuming that there are no nuances inherent to the offer being "non-Part 36" (I am not knowledgeable of that element of UK law).

The excerpt of your CCL is in terms of "compensation received from the Opponent", and has no indication of deductions from the opponent's disbursement. Unless key terms such as compensation are defined elsewhere in your agreement(s) with the solicitor, their applicable meaning would be that from common usage or laymen/legal dictionaries.

If you already gave signs about a tentative acceptance of the offer of settlement, the solicitor's remark about where "the base fee now stands" seems pointless. That is because the clause about base costs plus success fee is premised on you winning the case, and therefore seems inapplicable in the context of settlement.

Maybe the solicitor's remark is intended to convey that the settlement is too low compared with a realistic award from trial. If so, the solicitor should be straight-forward instead of trying make more profit for himself than what the CCL provides.

That being said, you need to assess carefully whether you "follow[ed] all advice given and compl[ied] with all he terms of our agreement", since a departure from that might help the solicitor overcome that clause.

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  • I assume it is for answering an out-of-scope question.
    – George White
    Dec 20, 2022 at 16:11
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    Clearly a cost order is a a nuance which affects OP's liability to his solicitor. If OP recovers all his costs from the opponent in addition to damages, then he owes his solicitor nothing. If he recovers no costs, he must settle the CFA entirely himself. Anything in between is also possible.
    – JBentley
    Dec 20, 2022 at 20:09
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    You're ignoring the first clause: "Our base costs [... and a] success fee of 25% of base costs". The second clause merely places a cap on that. To take a hypothetical example: Scenario 1 - OP accepts a non-Part 36 offer to settle for £10,000. The court decides not to award costs. The solicitor's fees (as stated by OP) are £8000 + £2000 = £10,000. That gets capped at £7500. OP walks away with £2500. Scenario 2 - OP accepts a Part 36 offer to settle for £10,000. The court awards full costs. The defendant pays £10,000 + £8000 + 2000. OP pays £10,000 to the solicitor and walks away with £10,000.
    – JBentley
    Dec 20, 2022 at 20:33
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    "The first clause is inapplicable because there is a difference between settling a claim and winning." - that's an assumption. CFA's are commonly drafted to be applicable to cases which are settled out of court. In this case the clause refers to "the compensation received from the Opponent" and doesn't restrict it to only compensation received by way of a court order. We can't definitively say one way or another whether this is the case without seeing the whole CFA.
    – JBentley
    Dec 20, 2022 at 20:57
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    @mjc If in your opinion this answer is good enough (based on the info you provided), kindly mark it as Accepted. That will prevent the Community bot from removing the post, and thus it would be available to others who experience a similar issue.To supplement information, feel free to post a follow-up question. The comments here are useful for showcasing the robustness of this answer, and the problem with editing this question is that the edit could misalign everything. Drafting in third-person you next post might deter some users from rushing to VTC under pretext of "request for legal advice".
    – Iñaki Viggers
    Dec 21, 2022 at 11:59

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