The decision in Evans v Fletchers Solicitors [2026] EWHC 1523 (SCCO), relates to a claim under the Solicitors Act 1974, in which the Claimant sought the total disallowance of the Defendant’s base costs, success fee and an after the event insurance premium (“ATE”) totalling £61,615.13. The remedy sought by the Claimant was based on a failure by the Defendant to adequately explore (and advise the Claimant on) the availability of before the event insurance (“BTE”). The Claimant argued that if the availability of BTE had been adequately investigated, he would not have incurred a liability for a success fee and ATE premium. Although the Court refused to disallow the Defendant’s base costs, the success fee totalling £30,365.13 was disallowed and the Judge stated that the ATE premium would have been disallowed but it did not form part of the assessment.

Background

The Claimant instructed the Defendant to represent him in a personal injury claim following a road traffic accident. The claim was settled for damages in the sum of £250,000 and the inter partes costs were agreed. The Defendant issued an invoice to the Claimant totalling £61,615.13 which included a success fee of £30,365.13, capped at 25% of the relevant damages.

When the Claimant became a client of the Defendant, he completed a form in which he confirmed that he had the benefit of family legal expense insurance as part of his home insurance with Zurich. Despite this, the Defendant produced a Conditional Fee Agreement (“CFA”) which the Claimant signed. The Court found no evidence of enquiries being carried out by the Defendant in relation to the BTE until a new fee earner took over conduct of the case 2 years after the CFA was signed.

Zurich responded to the enquiry to attach a copy of the policy booklet. In response, the Defendant sent a letter in which they sought confirmation of various points regarding the legal expense insurance cover and stating that if a response was not received within 14 days, then they would advise the Claimant that he should purchase an ATE policy. Zurich responded to again attach the policy booklet and direct the Defendant to the relevant page concerning legal expenses covered by the Claimant’s policy. Despite this, the conducting fee earner took the view that she had been unable to establish that the BTE policy covered the Claimant’s legal expenses. The Defendant, therefore, wrote to the Claimant to confirm the same. On that basis, the Claimant agreed to an ATE policy being taken out.

Following settlement of the claim, the Claimant instructed a new firm to provide advice in relation to the fees he had been charged by the Defendant. Investigations were carried out by the new firm in relation to the BTE policies, whether the same would have covered the legal expenses of the Claimant, and whether the Defendant contacted them to investigate the potential for funding of the claim. The insurers refused to confirm whether the legal expenses of the claim would have been covered by the policy if pursued at the relevant time.

Issues

There were 4 issues for the Court to determine.

Issue 1 – Was the Defendant’s approach to the enquiries into alternative funding unreasonable?

The Court found that the enquiries made by the Defendant were lacking in numerous respects, but the fact that no enquiries were carried out until 2 years after the Claimant provided details of the potential BTE policy was significant. Furthermore, the Court found that the Defendant had mischaracterised the letter from Zurich as one which simply refused to indicate whether cover was available. The Court found that the letter sent to Zurich was drafted in a way which “sought to encourage a lacklustre response from any potential LEI insurer so that the existing CFA arrangement was not disturbed by any putative BTE cover.”

Issue 2 – Was there BTE with legal expense insurance which the Claimant could have used?

The Court found that whilst there could be no absolute confirmation of insurance cover, on the balance of probabilities, there was BTE that would have covered the legal expenses of the claim.

Issue 3 – Would the BTE mean that there would have been no deductions?

The Defendant argued that the £50,000 limit of indemnity on the BTE policy was insufficient and, therefore, it could not have been utilised regardless. Whilst the Court accepted this argument to an extent, it was noted that the limit of indemnity on the ATE policy taken out was also insufficient at £100,000. The Court also noted that there would have been the option to obtain a ‘top-up ATE policy’ to increase the level of indemnity to an adequate level.

Issue 4 – Would the Claimant have used it if it were available?

The Court accepted the Claimant’s evidence that if he had been made aware that instructing a solicitor associated with his BTE policy would have resulted in no, or fewer, deductions from his damages then he would have chosen that option over instructing the Defendant.

Conclusion

The Court declined to disallow the base costs. The Court distinguished this case from the decision in McDaniel & Co (a firm) v Clarke [2014] EWHC 3826 (QB). In that case there was a failure to advise a Claimant to use trade union funding, which, if it had been used, would have left the Claimant with no direct liability to her solicitors. Here, the alternative funding was BTE which is an indemnity, therefore the Claimant would have remained liable for the Defendant’s base costs.

An argument was raised by the Claimant that the limit of indemnity on the unused BTE (£50,000) should be set against the Defendant’s bill. The Court rejected that argument because the Claimant had won his claim and recovered costs from the paying party. The only costs that would not have been recovered were costs that were unreasonable, and unreasonable costs would not have been recoverable under the BTE policy in any event.

However, the Court did disallow the success fee on the basis that it would not have been payable if the BEI policy had been utilised.

This case is a reminder to all litigators of the importance of undertaking thorough enquiries into alternative methods of funding at the outset.

Ellena Hunter is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercial@clarionsolicitors.com