The senior costs judge, Chief Master Hurst, has ordered Leigh Day to cut the 100 per cent success fee it charged for bringing a group action against oil company Trafigura to 58 per cent.
Leigh Day billed the company £105m in legal fees after it settled a claim it brought against the company on behalf of 30,000 claimants living in the Ivory Coast.
The firm had agreed to do the case on the basis of a conditional fee arrangement (CFA) that included a 100 per cent uplift in its billings. The firm said this could be justified because of the high risks involved in pursuing such a matter (17 May 2010).
The £100m claim was launched on behalf of claimants who, it was alleged, had suffered varying degrees of illness as a result of toxic waste being dumped around Ivorian capital Abidjan.
The dispute was settled in September 2009, with Trafigura agreeing to pay out £30m to the claimants, the equivalent of £1,000 each (23 September 2009).
The following May, Leigh Day lodged a claim for £105m in legal fees. This included a £10m legal expenses insurance premium and £5m in disbursements. Billable hours, which included the fees of two silks and two junior barristers, stood at £45m.
Trafigura’s lawyer, Macfarlanes partner Simon Nurney, responded by instructing three heavyweight silks – Henderson Chambers’ Charles Gibson QC, 39 Essex Street’s Sean Wilken QC and 4 New Square’s costs specialist Nicholas Bacon QC – to fight the fee.
The ruling, delivered last month, forms the basis of the issues that will be discussed when the matter goes to court in May.
It gives an insight into how bitterly the case is being fought. After dedicating more than four years of firm time to the case, Leigh Day will be banking on a bumper pay day, but Trafigura will not go down without a fight.
There are 22 key issues in dispute over the billings. These include allegations that the pre-action protocol was not followed properly, that rates charged were too high and that the success fee should be reduced because the risks involved in the case were less as the case progressed.
The judgment states that in his witness statement Nurney wrote “that the GLO was in essence an abuse of the process of the court, that the claims were exaggerated and that thousands of the claims were perhaps not even genuine.”
Such issues are vigorously disputed by Leigh Day’s counsel, Doughty Street’s Richard Hermer QC, who has so far done a good job of convincing Master Hurst that such issues warrant further examination.
Responding to Nurney’s statement Hermer argued that, true or not, all these points were in the possession of the defendants in September 2009 when they chose to settle the case.
The judge said all points on proportionality needed further discussion.
The 104-page ruling concerns a bill that is comprised of 55,000 items, all of which are challenged in the points of dispute. Trafigura gave the judge 60 binders to plough through and the defendant’s skeleton arguments, including the supporting schedules, ran to more than 1,000 pages. Together with Nurney’s statement dealing with key issues and exhibitions, the defendant’s paperwork ran to more than 3,000 pages.
Compare that with the claimant skeleton argument, which spanned 73 pages and witness statements totalling 923 pages.
The case is shaping up to be one of the most hotly contested of the year, with the costs hearing just as fiercely fought as the original case.