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English judge backs law firm on costs

Capping the amount that a solicitor can take from a client’s damages is enough to show that the client gave “informed consent” to the deduction, according to a court ruling in England reported by the Law Society Gazette of England and Wales.

The Gazette says the judgment, in the Swann v Slater & Gordon case, affects 400 conditional fee agreements.

District Judge Rouine, sitting in the High Court in Birmingham, also held that no fiduciary duty could arise during the process of negotiating a retainer.

Lead case

Regional costs judge Rouine was tasked with dealing with more than 400 ‘solicitor and own client’ costs assessments being brought against law firm Slater and Gordon.

Swann was the lead case, with the judge asked to determine a number of preliminary issues to then be applied to the wider caseload.

In an order dated 12 March, he found in favour of Slater and Gordon on all points before him.

Cap

Each retainer contained a provision capping the client’s potential liability at 25% of their damages. Judge Rouine said the existence of this cap had a “magnetic attraction” in terms of informed consent.

He added: “Being told that there is a cap, and what that cap might be, is more than sufficient information … for the purposes of obtaining informed consent from a client for deductions to be made from their award of damages.”

Judge Rouine said it would be an “impossible task” for a solicitor to “provide a client with specific advice as to every scenario and every level of damages which might be awarded, and the impact that such an award would have on the sums which the solicitors say could be deducted from the award of damages.”

He added: “The realistic and pragmatic approach … is for the client to be made aware of their potential maximum exposure to a deduction from damages.”