ruling made by Justice Alexander Henderson in a recent hearing regarding costs
could mean that insurance companies are now liable for 33 per cent uplift on
awards in cases where there is a no win no fee arrangement between attorneys
and their clients.
have sought a leave of appeal in response to the ruling.
England such cases carry an uplift of 100 per cent.
2002 Chief Justice Anthony Smellie ruled that conditional fee agreements
including uplift in the event of success were lawful in the Cayman Islands and
not contrary to public policy. In that case the success fee that was payable to
the Cayman attorneys was 28.5 per cent, while the fee payable to counsel was 50
in a subsequent case involving the National Trust for the Cayman Islands and
Humphreys Ltd in 2003, the Court of Appeal still found that this area needed
developing in the Cayman Islands. They described the state of the law in the
jurisdiction in respect of conditional fee agreements as “quite unsatisfactory”
and urged the attorney general and all responsible executive and legislative
authorities to give the matter urgent attention.
ruling simply means that insurers are now not just liable to pay an award in a
case that is lost, but an extra 33 per cent when the attorneys take the risk of
defending a client on the basis of only being paid if their side wins.
to the Cayman Islands Law Reports 2002, “A conditional arrangement is of obvious
advantage to a client who cannot afford to pay his own costs of litigation. In
such situations, the arrangement merely gives legal form to what would
otherwise be practical reality-the lawyer only gets paid if the client wins. Nobody
would question the virtue of a lawyer who proceeds to act for a client in doubt
of whether he will ever be paid.”
document goes on to say, “Finally, and over and above the benefit it will bring
to a client in a particular case, the availability of lawyers working under
conditional fee arrangements will generally facilitate access to the court by
members of the public.”
to Attorney Christopher McDuff of Thorp and Alberga, who instructed Richard
Lynagh QC in the matter of Daniel Bennett, on which Mr. Henderson’s ruling was
made, “This is a victory for people who generally would not have the means to
pay a lawyer and seek out justice, as well as a reason for insurers to come
clean when the odds are against them and not drag things on, wasting everyone’s
Bennett was awarded $40,000 in interim costs in his case, which involved an
accident that Constable Jonathan Andrews claimed was caused when Bennett, who
was trying to get away, was blocked by three boulders in the road. Mr. Andrews
claimed Bennett then turned and rode his bike into the police car.
on the basis of all the evidence, Justice Henderson said he was compelled to
believe Bennett’s account of the incident and found that there was only one
boulder in the road and Bennett’s path was not blocked, but he was instead hit
by the police car from behind, causing him to be pinned beneath the squad car.
attorneys said his hospital bill was in the region of $140,000 and he was
unable to work because of the injuries he sustained to his back as a result.
request for indemnity costs in the same matter was denied by Justice Henderson,
who ruled that the defence offered on behalf of the attorney general of the
Cayman Islands, who stands in place of the police vicariously, was reasonable
and not essentially absurd in its basis.
calls to various insurers for a comment regarding Justice Henderson’s ruling
were unreturned before news time.