Court ruling slashes claims solicitors' fees by 15%

Liability insurers have won a landmark ruling in the Court of Appeal that may erode the power of 'no-win no-fee' solicitors.

Solicitors' success fees recoverable through conditional fee agreements in simple personal injury claims have been reduced, following the judges' decision in Halloran v Delaney.

Sitting at the Court of Appeal, Lord Justices Gibson, Brooke and Tuckey decreed that Judges, "in claims as simple as this which are settled without the need to commence proceedings should now ordinarily decide to allow an uplift of 5% on the claimants lawyers costs."

The ruling will replace the previous uplift of 20%, and is seen by experts as a necessary curb on rising legal costs in personal injury claims.

Liability insurers instructed solicitors for the Appellants, Cost Advocates ltd for Mr Delaney. They were seeking a review of the costs claimed by Messer's Irvings solicitors for Mr Halloran.

Cost Advocates managing director Simon Edwards said: "This is by far the most significant decision on solicitors success fees since their introduction in 2000, and is a clear indication that the Judiciary is taking an increasingly hard line against escalating legal costs."

He added: "Where the risk of losing a claim is minimal, the success fee will also reflect that small level of risk, rather than disproportionately rewarding solicitors regularly handling such simple claims, as has recently evolved since success fees came into being, following the Access to Justice Act."