Att Gen v Barrett

• Jurisdiction: Cayman Islands
• Judge: (Chadwick, P., Forte and Campbell, JJ.A.)
• Judgment Date: 14 February 2012
• Court: Court of Appeal (Cayman Islands)
• Date: 14 February 2012

Court of Appeal

(Chadwick, P., Forte and Campbell, JJ.A.)

ATTORNEY GENERAL

and

BARRETT

Cases cited:

(1) Awwad v. Geraghty & Co., [2001] Q.B. 570; [2000] 3 W.L.R. 1041; [2000] 1 All E.R. 608; [2000] 1 Costs L.R. 105, considered.

(2) Bennett v. Att. Gen., 2010 (1) CILR 478, not followed.

(3) Giles v. Thompson, [1994] 1 A.C. 142; [1993] 2 W.L.R. 908; [1993] 3 All E.R. 321; [1993] R.T.R. 289, referred to.

(4) Hill v. Archbold, [1968] 1 Q.B. 686; [1967] 3 W.L.R. 1218; [1967] 3 All E.R. 110, referred to.

(5) Langley v. North W. Water Auth., [1991] 1 W.L.R. 697; [1991] 3 All E.R. 610, applied.

(6) National Trust v. Humphreys Ltd., 2003 CILR 201, considered.

(7) Quayum v. Hexagon Trust Co. (C.I.) Ltd., 2002 CILR 161, doubted.

(8) Thai Trading Co. v. Taylor, [1998] Q.B. 781; [1998] 2 W.L.R. 893; [1998] 3 All E.R. 65; [1998] 1 Costs L.R. 122; [1998] 3 FCR 606; [1998] P.N.L.R. 698, considered.

(9) Wallersteiner v. Moir (No. 2), [1975] Q.B. 373; [1975] 2 W.L.R. 389; [1975] 1 All E.R. 849, considered.

Legislation construed:

Grand Court Rules 1995, O.62, r.16: The relevant terms of this rule are set out at para. 29.

Practice Direction cited:

Practice Direction No. 1/2001, Guidelines Relating to the Taxation of Costs.

Attorneys-at-Law-remuneration-conditional fee agreement-Practice Direction No. 1/2001, para. 7.2 prohibits recovery on taxation of uplift fee in CFA, even if fee calculated as percentage of hourly rates-arguably also prohibits recovery of basic fees in CFA

Contract-illegal contracts-agreements contrary to public policy-maintenance and champerty-enforceability of conditional fee agreements as between attorney and client uncertain-Practice Direction No. 1/2001, para. 7.2 may suggest enforceable

The respondent brought an action in the Grand Court against the appellant to recover damages in respect of injuries caused in a road accident by a police officer.

After the respondent issued proceedings, she entered into two conditional fee agreements (‘CFAs’) to the effect that if she were to succeed (i) she would pay her attorneys their basic charges, disbursements and a success fee, set, subject to court approval, at 33.3% of all their professional costs; and (ii) her leading counsel would receive an ‘uplift’ of 33%. Prior to the commencement of the trial, and in accordance with earlier

guidance given by the Grand Court, the approval of the court to both agreements was sought and received.

The respondent was successful on the issue of liability and the Grand Court (Quin, J.) ordered the appellant to pay her costs, to be taxed on the standard basis if not agreed. On the respondent”s application, the court made a declaration that the two CFAs were-as between attorney and client and barrister and attorney, respectively-reasonable and thereby approved. Further, applying earlier Grand Court authority, it held that para. 7.2 of Practice Direction No. 1/2001 (‘the guidelines’)-which provided that amounts claimed on the basis of CFAs or any basis other than hourly rates would be disallowed-did not prohibit the recovery of uplifts contained in CFAs if such uplifts were themselves calculated on an hourly rate basis. By consent, the court granted the appellant leave to appeal against the terms of the costs order. The appellant appealed, but chose not to play any part in the hearing as he intended to refer the subject of CFAs to the Law Reform Commission for review. The Cayman Islands Insurance Association was granted leave to intervene.

The intervener submitted that para. 7.2 of the guidelines prohibited the recovery of uplifts as costs and that the decision of the Grand Court to the contrary was wrong. Further, it submitted that the court should not have allowed for leading counsel as it was not appropriate for him to have been retained in a case of this nature. The respondent submitted that the recovery of the uplifts as costs was permissible as para. 7.2 only prohibited the recovery of amounts claimed under CFAs which were not calculated according to hourly rates. Further, in allowing for leading counsel the Grand Court was exercising its discretion and the Court of Appeal should be slow to reach a different conclusion.

Held, allowing the appeal in part:

(1) The court would alter that part of the order allowing for recovery of the uplifts. Both agreements clearly fell within the meaning of ‘CFA’ in para. 7.2 of the guidelines, which, properly understood, directed that amounts claimed on the basis of CFAs would be disallowed-it could not be read as directing only that amounts claimed on the basis of CFAs, other than by hourly rates, would be disallowed. The contrary Grand Court decision was weak authority and would not be followed. In exercising its discretion as to the amount of costs allowed on taxation, the Grand Court was required to have regard to the guidelines (GCR, O.62, r.16(2)) and it could not be said that a taxing officer who allowed uplifts claimed under CFAs could legitimately have done so. Therefore, para. 7.2-in effect, if not in terms-prohibited the recovery of uplifts claimed under CFAs. Further, it was arguable-although not advanced on this appeal-that para. 7.2 prohibited recovery not only of uplifts, but also of any basic fees payable under CFAs (paras. 14–16; para. 35; paras. 45–48).

(2) The court would not decide whether CFAs were enforceable as between attorney and client, as it was not necessary to do so to dispose of the appeal. The Attorney General”s assurance that the matter would be

referred to the Law Reform Commission was a further reason to refrain from deciding the question-the merits of the enforceability of CFAs raised complex questions of public policy and warranted consideration by the Law Reform Commission so that full account could be taken of all the interests involved, in particular, the need to provide access to justice for those who could not afford it. However, it was arguably implicit in para. 7.2 that CFAs were enforceable as between attorney and client-otherwise the direction would be otiose (paras. 51–57).

(3) The court would not alter that part of the Grand Court”s order allowing for leading counsel. The Grand Court conducted the trial and was best placed to decide if it was reasonable to have retained leading counsel (para. 16).

1 CAMPBELL, J.A.: This is an appeal from an order as to the costs recoverable by the respondent, Latoya Barrett, who succeeded in the Grand Court on the issue of liability in proceedings arising out of a road traffic accident. As the driver of the other vehicle involved in the accident

was a police officer on duty, the proceedings were defended in the name of the Attorney General.

2 Shortly after the issue of proceedings, Ms. Barrett entered into a conditional fee agreement with her attorneys (Myers Alberga, now Thorp Alberga). They agreed that were her claim to succeed, Ms. Barrett would pay her attorneys their basic charges, disbursements and a success fee. The success fee was set, subject to the approval of the court, at 33.3% of all of the attorneys” professional costs. There was also an agreement between Ms. Barrett, her attorneys and leading counsel, Mr. Lynagh, Q.C., that he would receive an ‘uplift’ of 33% if Ms. Barrett were successful in the proceedings. Prior to the commencement of the trial, and in accordance with guidance given by Smellie, C.J. in Quayum v. Hexagon Trust Co. (C.I.) Ltd. (7), the approval of the court was sought and received to both agreements.

3 At the conclusion of the hearing on liability, Quin, J., the trial judge, ordered that the defendant pay the plaintiff”s costs of and occasioned by the determination of the trial on liability and that such costs be taxed on the standard basis if not agreed. On the application of the plaintiff, the judge went on to make the following declaration:

‘2.1 The uplift of 33.3% contained in the conditional fee agreement entered into between the plaintiff and her attorneys-at-law dated August 20th, 2008, and the uplift of 33% contained in the conditional fee agreement entered into between the plaintiff”s attorneys-at-law and counsel dated December 4th, 2009, are reasonable as between attorney and client and as between barrister and attorney respectively and on that basis are hereby approved.

2.2 Paragraph 7.2 of Practice Direction No. 1/2001 titled Guidelines Relating to the Taxation of Costs (“the guidelines”) does not prohibit the recovery of the uplifts contained in the conditional fee agreement entered into between the plaintiff and her attorneys-at-law, nor the uplift in the conditional fee agreement entered into between the plaintiff”s attorneys-at-law and counsel, if such uplifts are calculated on an hourly rate basis, and the taxing officer, when assessing the costs payable under this order, may, if in the exercise of his discretion he thinks it just to do so, assess such costs on the footing that the appropriate hourly rates are those which include uplifts.

2.3 It was reasonable for the plaintiff and her attorneys to engage leading counsel (Mr. Lynagh, Q.C.) to act on the plaintiff”s behalf.

3. The defendant shall pay to the plaintiff an interim award of costs in the sum of CI$50,000.

. . .

4. The defendant shall pay the claimant”s costs of the present application in any event, such costs to be taxed on the standard basis if not agreed.

5. By consent . . . the defendant is granted leave to appeal against paras. 2–4 of this order.’

4 The Attorney General appealed against the judge”s order but chose not to play any part at the hearing of the appeal, before referring the matter to the Law Reform Commission.

5 The Cayman Islands Insurance Association, representing the insurance industry in the Cayman Islands, applied for and was granted leave by the court to intervene in the appeal. Mr. Reed, Q.C. (who appeared for the interveners with Mr. Kirby) accepted that there could be no objection to a litigant...