Legal teams handling cost disputes against personal injury practices argue that clients won’t abandon their efforts following a recent ruling that shuts down one possible avenue for compensation. The Court of Appeal decided on Monday that Part 18 requests under the Solicitors Act couldn’t compel law firms to reveal any commissions earned from securing after-the-event (ATE) insurance policies.
The decision and its limits
The court’s ruling was clear that solicitors ought to tell clients what commissions had been paid if they were asked, even if there appeared to be no easy and cost-effective means of dealing with it. In the Turner v Coupland Cavendish case, Lady Justice Andrews described refusing such requests as both ‘unwise’ and ‘unedifying.’
Although the Part 18 method for seeking redress is now off the table, the lawyers behind the case insist this doesn’t resolve the issue entirely. The judgment didn’t examine broader transparency concerns about commissions, leaving other potential routes for clients to explore.
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Alternative routes remain
Robin Dunne and Priya Gopal, who represented the claimant at the Court of Appeal on behalf of Leeds-based JG Solicitors, stated that the appeal didn’t settle the question of commission transparency. Writing in an article titled ‘Right question, wrong forum,’ they argued that courts have made it clear solicitors cannot ignore client inquiries about commissions.
‘There are a multitude of cases where solicitors who act for former clients in costs claims are seeking information as to whether secret commissions have been paid as part of ATE premiums in low value RTA claims,’ they said. ‘This case makes it plain that this issue is extraneous to a solicitor and client assessment. It does not, however, put the matter to bed.’
A solicitor who unreasonably refuses to answer is likely, considering Andrews LJ’s guidance, to have to pay the costs of any such claim.
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The potential commission at stake in Turner was estimated to be no more than £25, based on an ATE premium of £245. Lady Justice Andrews said in her ruling that the only people who stood to gain from a successful challenge to commissions were those who have made an industry out of challenging solicitors’ costs.
Impact on future cases
Nick McDonnell, a director and costs lawyer at Manchester firm Kain Knight—which defended the successful appellant in Turner—said the ruling clarified the boundaries of solicitor-client assessments under Section 70 of the 1974 Solicitors Act, the purpose of cash accounts, and the proper use of Part 18 requests for additional information.
‘Part 18 can legitimately be used within a section 70 assessment,’ he said. ‘The court gives examples such as asking why so much time was spent on a particular task or why work was undertaken by a partner rather than somebody more junior.’
