Determining Success Fees in Personal Injury Cases

In a recent judgement, the court has provided significant clarity on the right to deduct a success fee from claimants’ damages. Solicitors would do well to check their agreements with their clients.

Summary of Judgement

The case in question, SJ (a minor suing by his mother and Litigation Friend AJ) v DGJ Tanner t/a Sopley Farm [2025] EWCC 17, involved a dispute over the correct way to calculate a success fee in a personal injury case. The court ruled that solicitors do not have an automatic entitlement to 25% of the damages, a decision that underscores the importance of transparent and fair cost calculations in legal proceedings.

The judgement highlighted several key points:

Costs Padding:

District Judge Lumb criticised the claimant solicitors for a considerable amount of duplication of work, which he described as ‘costs padding’. The firm incurred almost £30,000 in costs for a claim that settled for £3,600.

Unlawful Contingency Fee:

The judge expressed concern that the solicitors seemed to know at the time of instruction that they would deduct the maximum 25% from the client’s damages, which he described as an unlawful contingency fee.

Fixed Costs Regime:

The firm argued that it is not possible to process this type of claim within the fixed costs regime at a profit while providing high-quality service to clients.

Implications for Solicitors:

This judgement serves as a reminder for solicitors to ensure that their cost agreements are fair and transparent. The court’s decision underscores the importance of clear and transparent cost calculations, ensuring that clients are not unfairly charged, and is particularly relevant for personal injury cases, where success fees can significantly impact the final settlement.

As legal professionals, we should take note of this ruling and adjust our practices accordingly to ensure compliance and maintain client trust.

The full Judgement can be read on The National Archives website.