Conditional fees not recoverable

Seaga v Harper (2) [2009] UKPC 26; TLR 10 July

On an appeal to the Privy Council, the Board has power under s15 of the Judicial Committee Act 1833 to make a direction for the costs incurred in the prosecution of the appeal. If the Board directed the costs were to be paid on the standard basis, they would only be allowed if they were reasonable and proportionate to the matters in issue. There was no Act or Order in Council which allowed for the recovery of success fees or insurance premiums. The addition of a success fee to a fee that was reasonable and proportionate was almost certain to render the resultant fee unreasonable and disproportionate. Although the language of s15 of the 1833 Act was very wide, it certainly did not embrace the recovery of a success fee. Similarly, the expense of taking out insurance cover was not naturally to be regarded as part of the costs incurred in the prosecution of an appeal as opposed to the costs involved in protecting an unsuccessful party from having to pay the costs incurred by the other party in prosecuting the appeal. The Board would regard it as unthinkable that a conditional fee agreement and insurance regime should be introduced into the taxation of costs incurred in appeals before it without any prior attempt to ascertain the wishes of the parts of the commonwealth primarily affected. Accordingly after-the-event insurance premiums and success fees under conditional fee agreements entered into with English counsel and solicitors were not recoverable as costs by a successful party in an appeal to the Privy Council from Jamaica whose domestic law does not permit conditional fee agreements or allow for a successful party’s expenditure on after-the-event premiums to be an allowable disbursement.