FKJ v RVT & Ors

Costs Judge Leonard:

1. This is the assessment on the standard basis of the costs payable by the Defendants to the Claimant under the terms of a consent order made on 1 July 2024. The purpose of this judgment is to assess success fees, recoverable by the Claimant as a part of those costs and provided for in conditional fee agreements (“CFAs”) dating from January and April 2019.

2. The Claimant claims success fees at 100% of her solicitors’ and counsels’ basic fees, representing the final stage of staged success fees for a case that settled on the eve of trial. The Defendants say that the success fees for both solicitors and counsel should be limited to 25%. The only common ground is that the solicitors’ and counsel’s success fees should not, in this case, be materially different.

3. The success fees account for some £1,209,366.17 (before VAT) of a bill of costs totalling £3,080,366.56, so this is a significant issue. I am grateful to Mr Mason (for the Claimant) and Mr Mallalieu KC (for the Defendants) for their comprehensive submissions on this issue.

4. The order of 1 July 2024 brought to a conclusion a claim by the Claimant against the Defendants for the misuse of private information (“the MPI claim”). The MPI claim had been issued on 6 November 2019, having first been intimated by the Claimant to the Defendants in a Letter of Claim nine months earlier.

5. Before considering the history of that litigation, I should set out briefly the principles governing MPI claims. Misuse of Private Information

6. Campbell v Mirror Group Newspapers Ltd [2004] UKHL 22 confirmed, by reference to the Human Rights Act 1998 and to Article 8 of the European Convention for the Protection of Human Rights (“ECHR”), that a person may claim redress for the misuse of information in which that person had a reasonable expectation of privacy.

7. Liability for misuse of such private information is determined by applying a two-stage test. The first stage of the test is to assess whether the claimant had a reasonable expectation of privacy in the relevant information.

8. There is no reasonable expectation of privacy in trivial or anodyne information ( Bloomberg LP v ZXC [2022] UKSC 5 , Ambrosiadou v Coward [2011] EWCA Civ 409 ), but some types of information obviously do entail such a reasonable expectation. They would include details of an individual’s sex life and (the Defendants submit, and I agree) details of an individual’s medical history.

9. Mr Mallalieu has referred me to the observations of Eady J at paragraphs 100-101 of his judgment in Mosley v News Group Newspapers [2008] EWHC 1777 (QB): “…people’s sex lives are to be regarded as essentially their own business - provided at least that the participants are genuinely consenting adults and there is no question of exploiting the young or vulnerable… The notion of privacy covers not only sexual activities but personal relationships more generally …”

10. Dishonesty, malice and bad faith are irrelevant to liability for misuse of private information ( HRH Duchess of Sussex v Associated Newspapers Ltd [2020] EWHC 1058 (Ch) .

11. If there is a reasonable expectation of privacy, the second stage of the test is whether there are other relevant considerations which justify a defendant’s interference with a claimant's privacy. The claimant’s rights may be outweighed by a countervailing interest of the defendant ( McKennitt v Ash [2006] EWCA Civ 1714 , Bloomberg LP v ZXC ). It is for the defendant to establish that any such defence applies.

12. This second stage of the test may turn upon whether the use of the information was proportionate (for example, by reference to the defendant’s right to freedom of expression under Article 10 of ECHR or to a fair trial under article 6). Even if an interference with the right to privacy can be justified, if it goes further than is necessary to achieve the justified aim then a claim for the misuse of private information will succeed.

13. To paraphrase Mr Mallalieu’ submission on the point: where, in respect of information in which a claimant had a reasonable expectation of privacy, a defendant has interfered with that right of privacy, the burden of establishing that the interference was justified and proportionate falls on the defendant. The Employment Tribunal Claim

14. Between 20 February 2017 and 21 December 2017 the Claimant was employed as a solicitor by the second and third Defendants. The first Defendant was the senior partner of the second Defendant, a firm of solicitors. The third Defendant was another law firm operated by the first Defendant, as sole practitioner, from the same premises as the second Defendant.

15. On 21 December 2017, the Claimant’s employment was summarily terminated by the first Defendant. On 9 March 2018 the Claimant brought proceedings against the Defendants before the Employment Tribunal (“ET”) for wrongful dismissal, sex discrimination, harassment contrary to section 26 of the Equality Act 2010 , victimisation and unlawful deductions from wages. She was represented in those proceedings by Gunnercooke LLP. The claim included 79 separate allegations of sexual harassment against the first Defendant, some of a serious nature.

16. The evidence relied upon and disclosed by the Defendants in the Claimant’s ET claim included information extracted from the Claimant’s WhatsApp private messaging account. That evidence included contemporaneous messages, photographs, video footage and voicemails, some of which undermined the Claimant’s claim.

17. The Claimant’s initial response was to amend her ET claim to include an allegation that the WhatsApp messages had been obtained by accessing her account unlawfully and without her permission, to apply for the exclusion of that evidence, and to seek additional damages. In a case management hearing on 11 February 2019 the Claimant however informed the ET that she was no longer seeking to ask the ET to determine those issues, as she had been advised that the appropriate remedy lay in High Court proceedings.

18. The ET claim was heard over 15 days between 18 February and 11 March 2019. The ET’s judgment, which ran to 76 pages, was handed down on 18 March 2019. All of the Claimant’s claims were dismissed.

19. The ET rejected the Claimant’s evidence on material matters, finding much of it to be exaggerated, unreliable or (either expressly, or by necessary implication) untruthful. Among its findings were that some of her more serious allegations against the first Defendant were the expression of malign intentions on her part toward him; that she had brought her claim in bad faith; that she had been prepared to lie to suit her purpose; and that she had been justifiably dismissed without notice for admitted dishonesty amounting to gross misconduct.

20. With regard to the information extracted from the Claimant’s WhatsApp account, the ET observed, at paragraph 32 of its judgment: “There was a huge quantity of personal and private WhatsApp messages in the bundle between the claimant and her partner and the claimant and her best friend. We took account of this evidence, because it was before us. It is a matter for the other proceedings to determine the legality of the way in which that evidence was obtained.”

21. According to one of the skeleton arguments filed on behalf of the Claimant in the MPI claim, of the 79 allegations of sexual harassment made by the Claimant before the ET ten were resolved by the Tribunal in reliance, in part or in whole, on the WhatsApp evidence. In three instances the allegation was determined entirely based on the WhatsApp evidence. In the other seven, the WhatsApp evidence was one of the evidential factors. The MPI Claim: Pre-Action

22. In October 2018 the Claimant instructed Taylor Hampton, who acted (and continue to act) for the Claimant in her MPI claim. On 30 January 2019 the Claimant and Taylor Hampton entered into a CFA (“the Taylor Hampton CFA”) for the purposes of the MPI claim.

23. Prior to that date, Taylor Hampton had spent over 31 hours reviewing documentation provided by the Claimant and working on a Letter of Claim. That time included about four hours in consultation with counsel, Mr David Hirst, who participated in the drafting of the Letter of Claim.

24. The Claimant’s Letter of Claim was sent to the Defendants on 1 February 2019. At that point the ET hearing had concluded but judgment was still awaited.

25. Mr Hirst entered into a CFA with Taylor Hampton for the purposes of the Claimant’s MPI claim (“the Hirst CFA”) on 3 April 2019. This was followed by a CFA between Adrienne Page KC and Taylor Hampton (“the Page CFA”) dated 4 April 2019.

26. The Letter of Claim is long and detailed. It refers to allegations which would in due course be rejected by the ET, and much of what is said in it remains contentious, but its allegations of unlawful access to and misuse of the Claimant’s private information by the Defendants remained central to the MPI claim throughout its lifetime. The following passages are illustrative of its tone and content: “Having reviewed your Re-Amended Grounds of Resistance, disclosure list and various of the correspondence in the Employment Litigation or related to it, both ourselves and counsel are of the view that it discloses obvious and unmistakable evidence of unlawful interception of our client's communications, including confidential and/or privileged information relating to the Employment Litigation and communications with more than one witness or potential witness, and private and sensitive information shared with close friends and family relating to health and sex… Accordingly, our client brings a claim… for the tort of misuse of private information… As a specialist firm… we feel compelled to observe that in our experience, this case is one of the most egregious cases of misuse of private communications, not least because of its scale, the purpose of the misuse and the fact that its perpetrator is a solicitor and officer of the court… In view of the impending forthcoming Tribunal case, our client will require urgently an explanation of when you started to misuse her private information, and the scale and nature of what you have done in that regard. Prima facie your possession of the logs and other copies of private messages, is evidence of a serious breach of Articles 6 and 8, an open and shut civil claim for misuse of private information and offences under GDPR. The circumstances engage fairness, justice and are exceptional… ”

27. The Letter of Claim turned upon two key allegations. The first was that the first Defendant had obtained the pin code to the Claimant’s mobile telephone and then used the “WhatsApp Desktop Client” to gain computer access to her WhatsApp account. It was alleged that interference with the Claimant’s WhatsApp account had started in the last two months of 2017 and continued thereafter. This continued into October 2018, “well into” the ET litigation. Although the Claimant discovered the interference in June 2018, she could not log out of the account, ending the Defendants’ ability to eavesdrop upon it, until mid-October 2018, when the police, WhatsApp and WhatsApp’s lawyers had concluded their investigations (as I understand it, into the nature and source of the interference).

28. The second key allegation was that the Defendants had misused the private information obtained in that illicit fashion, including as a weapon against the Claimant in the ET proceedings; as a means of breaching the Claimant’s rights of legal privilege and confidentiality in those proceedings; to intimidate a witness who would otherwise have assisted the Claimant; and even to threaten the Claimant’s ET solicitor with defamation proceedings.

29. The Defendants’ position before the ET had been that the WhatsApp information had been supplied by a third party or recovered from the Claimant’s work computer. In this respect the Letter of Claim referred to two pertinent authorities. The first was the judgment of the European Court of Human Rights in Barbulescu v Romania (61496/08). Barbulescu applied the principle that the reasonable expectation of privacy extends to personal communications in the workplace, to the effect that in order to comply with Article 8, unequivocal notification should be given by an employer of any monitoring of such communications.

30. The second was the decision of the Court of Appeal in Imerman v Tchenguiz and others [2010] EWCA Civ 908 , which confirmed that it was a breach of confidence for a person intentionally to obtain another person's information secretly and without authorisation, knowing that the information was subject to a reasonable expectation of privacy at common law and in accordance with Article 8; or without that other person's authority, to examine or copy a document the contents of which were or ought to have been appreciated to be confidential; or to supply copies of such a document to a third party. In principle, a claimant who established a right of confidence in information in a document was entitled to injunctive relief to prevent such conduct.

31. Imerman concerned private documentation belonging to a husband, obtained by illicit means by a wife, with a view to their use in ancillary relief proceedings. The court ordered that the documentation be handed over to the husband’s solicitors, who could consider and advise upon the husband’s disclosure obligations. No copies were to be retained by the wife.

32. Among the remedies sought in the Claimant’s Letter of Claim were an undertaking for delivery up of the WhatsApp communications, any copies to be destroyed (with separate provision for the documents before the ET); an undertaking not to use the information for any purpose in the future; compensation; and costs.

33. The Letter of Claim concluded by confirming that the Claimant had entered into a CFA with Taylor Hampton, and set out the structure of Taylor Hampton’s success fee (referred to below). It also gave details of an ATE policy entered into by the Claimant.

34. The Defendants’ relatively short Letter of Response was dated a week later, 8 February 2019. The Defendants asserted that the information from the Claimant’s WhatsApp account had either been supplied by an anonymous third party or left by the Claimant on a work laptop; that there could be no objection either to the third party’s supplying such information to the Defendants or to the Defendants’ deploying it in evidence; that it had been used for the purposes of defeating a false claim; and that the Claimant should have, but had not, disclosed it herself. Barbulescu and Imerman were dismissed as relating, respectively, to Romanian law and Ancillary Relief proceedings.

35. The remedies sought by the Claimant, including the handing over of the WhatsApp evidence, were refused. The letter did however confirm that the Defendants would make use of the information only for the purposes of the ET proceedings or any regulatory or law enforcement investigation. The MPI Claim: Statements of Case

36. The Claimant’s Particulars of Claim built upon the Letter of Claim, turning upon the same two key allegations. They repeated the allegation of illicit access to the Claimant’s WhatsApp account by the Defendants. They emphasised the self-evidently private and intimate nature of much of the intercepted material. This included information about the Claimant’s relationship with her boyfriend, subsequently her husband, including sexually explicit material and information about their sex life together; information about the Claimant’s health and wellbeing; information about the Claimant’s emotions, moods, and thoughts; information about the Claimant’s social life with friends and family; information about the nature of the Claimant’s relationships with a large number of friends, family and colleagues; and information about the Claimant’s personal financial affairs.

37. The Claimant’s Particulars of Claim also highlighted that the intercepted material included information about the Employment Proceedings, including confidential deliberations on without prejudice matters, instructions to the Claimant’s solicitor, the initial advice on the prospects of success given by the Claimant’s insurance panel solicitors, and strategic decisions about the litigation, including contacting potential witnesses and discussing evidence with them.

38. Aggravated damages were sought on the basis that the Defendants had deliberately hacked into the Claimant’s account; the use and deployment of the Intercepted Information for the purposes of obtaining an unfair advantage in litigation within the Employment Proceedings, by giving the Defendants an illegitimate insight into the Claimant’s purposes, strategy and instructions, including access to legally privileged information; approaching the Claimant’s potential witnesses to try and threaten and deter them and in relation to settlement/compromise of the litigation; and the “cocksure and unrepentant” response of the Defendants to the Letter of Claim.

39. Among the issues raised in the Particulars of Claim which had a bearing regardless of the source of the WhatsApp evidence disclosed by the Defendants in the ET proceedings were that, rather than deploying the WhatsApp evidence directly against the Claimant in the ET proceedings, the Defendant should have passed the material unread to the Claimant’s solicitor and made an appropriate request for disclosure; that the first Defendant, as a senior solicitor, could be expected to know that the WhatsApp evidence attracted a reasonable expectation of privacy; and that the Defendants, with a view to assisting their defence before the ET, disclosed to a former employer of the Claimant private comments made about him on WhatsApp.

40. The Particulars of Claim also referred to what would appear to have been the Defendants’ stated policy on the monitoring of computer and internet usage, which was stated not to comply with Article 8, nor to apply to the Claimant, being limited to “support staff”.

41. The Defence denied that the Defendants had obtained access to the Claimant’s WhatsApp account without authorisation (again on the basis that it had been obtained from an unnamed third party and the Claimant’s work laptop); that the Claimant’s disclosure of her WhatsApp messages had been inadequate, leading to a successful application to the ET for an order for disclosure of WhatsApp messages between the Claimant and others over key periods; that the Defendants had not threatened any third parties; that the Claimant did not resist (and so effectively consented to) the admission in evidence before the ET of the WhatsApp messaging, which was central to the ET’s findings: that the material had not been misused, but properly deployed in the public interest to defeat a dishonest claim; and that the Claimant’s Article 8 rights (it being admitted that the WhatsApp evidence was of a private nature) were outweighed by the Defendants’ rights pursuant to articles 6, 8 and 10 ECHR.

42. The Defendants also counterclaimed for malicious prosecution and harassment. The counterclaim has no direct bearing on the issues I have to determine, but I should record that the Defendant claimed ET costs of £360,176, loss of net profit of £129,644.54 and general damages for distress. The Strike-Out Application of 11 November 2020

43. I have summarised the MPI Letter of Claim, the Letter of Response, the Particulars of Claim and the Defence because they offer an indication of the issues that might reasonably have been anticipated when the Taylor Hampton, Hirst and Paige CFAs were entered into.

44. These are of necessity brief, broad summaries of the detailed cases set out by each of the parties. The Letter of Claim, the Defendants’ Letter of Response of 8 February 2019 and the pleadings that followed covered a lot of factual and legal ground. For a pertinent and impartial summary of the issues in the MPI claim, one can look to a judgment of Master Davison dated 11 January 2023. That judgment was given on an application by the Defendants to strike out the claim, alternatively for summary judgment (and for judgment on the Counterclaim).

45. The grounds of the application were that the claim was an abuse of process, the costs being out of all proportion to its value; that it was in breach of the Henderson v Henderson principle (in pursuing a claim that had been abandoned before the ET) and that it was “premised upon a breach of the implied undertaking prohibiting collateral use of disclosure in the ET proceedings”.

46. Having summarised the history of the proceedings before the ET, Master Davison continued at paragraphs 2-5 of his judgment: “2. This claim is about how the defendants came to have and to retain the WhatsApp messages. It is a claim for misuse of private information (“MPI”).

3. There were some 18,000 messages occupying some 900 pages of the Tribunal’s bundle. (The claimant was a heavy user of WhatsApp.) They were private messages from the claimant to her partner (now husband), BRB, and her best female friend, KNF. The defendants had come to be in possession of a complete log of the claimant’s chats with BRB from January 2017 through to April 2018 and with KNF from March 2016 to April 2018. It is obvious that they were communications in respect of which the claimant would ordinarily have had a reasonable expectation of privacy. They contained several years’ worth of day-to-day information about her professional, social and private life, including about her health and sex life. Some of the messages and images which she shared with BRB were of the most intimate kind.

4. The claimant first became aware that the defendants were in possession of her WhatsApp messages when she received the Grounds of Resistance in the Tribunal claim. This was on 12 June 2018. Disclosure of the actual messages was provided in two tranches, the first on 28 November 2018 and the second at the end of January 2019. On 1 February 2019, the claimant, acting by her present firm of solicitors, wrote a pre-action letter alleging that the messages had been “hacked” and putting the defendants on notice of an MPI claim.

5. The claimant’s case was that RVT hacked into her WhatsApp messages by setting up the computer-based “WhatsApp Web” and using her smartphone to scan the QR code generated, which operated as the only authorisation required by the site. He was thereby able to capture the entirety of her available WhatsApp messages. The claimant alleges that setting up WhatsApp Web was the work of a few moments and that RVT would have had numerous opportunities to use (or misuse) her smartphone in this way.

6. RVT’s explanation for his possession of the messages was twofold. He said that a substantial quantity of messages were found on her work laptop when he “reviewed the contents of the laptop [in January 2018] to establish why the claimant was attempting to login after she was dismissed and to ensure that the laptop could be safely passed to another member of the firm and did not contain personal information of the claimant”. These messages were printed out and retained, following which the messages were deleted from the laptop. Secondly, he said that two further tranches of messages had been received via letters from an anonymous source. The first letter was in February 2018; the second in January 2019. The second letter (“conveniently and remarkably” as the claimant characterised it) provided updated logs of the claimant’s messages with BRB and KNF from 22 December 2017, i.e. the day after her dismissal, to April 2018.”

47. At paragraph 20 of his judgment Master Davison made this observation: “… surprising as it may seem given the nature of the documents and the lack of relevance of the overwhelming majority of them… all the WhatsApp messages were placed into the bundle of documents, which was deployed at the hearing, which was in public. (A hearing to which reporting restrictions apply is still a public hearing.)”

48. At paragraph 8 of his judgment Master Davison also offered a useful summary of the history of the High Court litigation to date: This claim was issued on 6 November 2019. Statements of Case were exchanged. These included a counterclaim by the defendants based on the common law torts of malicious prosecution and abuse of process and the statutory tort of harassment under the Protection from Harassment Act 1997 . Costs budgets were prepared and the case was listed for a Costs and Case Management Conference before (then Deputy) Master Amanda Stevens. On 11 November 2020, the day before that CCMC, the defendants issued an application to strike out/grant reverse summary judgment on the claim and for summary judgment on the counterclaim. As a fallback position, they asked for an order making the claimant’s defence of the counterclaim conditional upon her bringing a substantial amount of money into court. They asked for a similar order in respect of their defence of the claim. Remarkably, and very unsatisfactorily, the application has taken two years to come to a hearing. That was largely due to the defendants’ application to rely upon the terms of a Part 36 offer made by the claimant as a consideration relevant to strike out. Senior Master Fontaine refused that application. The defendants were granted permission to appeal but, on 25 February 2022 before Collins Rice J, they were unsuccessful in the appeal. They then sought permission for a second appeal, which was refused by Warby LJ on 13 May 2022.”

49. As to the merits of the Defendants’ applications, Master Davison said this: Despite the extensive evidence devoted to it, the application for reverse summary judgment on the claim was not, in the end, pursued. As to the other applications, I have reached the clear conclusion that they are without merit. Parts of them are, indeed, not worthy of serious consideration. My overall impression is that they are an attempt to stifle a claim that the defendants would prefer not to contest on its merits. In those circumstances, I will deal with them succinctly and without extensive citation from the many authorities I was referred to… I find it hard to agree that the claim will face significant problems. Indeed, on present material (and without so deciding) it seems to me that the issue will more likely be the extent rather than the principle of the claimant’s recovery in her MPI claim. I have reached this provisional conclusion based upon the defendants’ pleaded case. It cannot be seriously contested that the claimant had a reasonable expectation of privacy in her WhatsApp messages. The defendants, at paragraph 13.1 of the Amended Defence, have pleaded that she could not have had a reasonable expectation of privacy or confidence in relation to material saved or downloaded to her work laptop during working hours. But (a) that plea could not apply to the messages which, on the defendants’ case, were apparently intercepted by the writer of the anonymous letters and (b) no explanation or authority has been offered for the proposition that private information downloaded to a work laptop (a very common scenario) thereby loses its private character. Only some 40 or so of the messages (out of very approximately 80,000) were in fact deployed in the ET claim and only about half of those 40 were strictly probative of an issue (and therefore disclosable). In respect of the bulk of the messages, there was no relevance to the ET proceedings and no justification for their retention or use. Further, the WhatsApp messages that were, on his case, (a) taken by RVT from the claimant’s work computer in January 2018 and (b) received anonymously on 8 February 2018 both pre-dated the ET proceedings. Given their obvious privacy and given the absence at that time of any proceedings to which the messages might be relevant, he would have come under an immediate duty to notify the claimant and deliver up the messages to her. But he did not do so. Finally, even if those proceedings had by then been on foot, the retention of private communications would still have been prima facie actionable because it would have been an impermissible form of self-help which it is the policy of English law to discourage; see Imerman v Tchenguiz [2010] EWCA Civ 908 . The correct course of action would still have been to return the material to the claimant or her solicitors who would then have had disclosure obligations in respect of it… It is unrealistic to submit that this claim reveals “no real or substantial wrong” or that “litigating the claim will yield no tangible or legitimate benefit to the claimant proportionate to the likely costs and use of court procedures”. Indeed, it is so unrealistic as to call into question whether the defendants have any genuine or honest belief in this being a proper basis for strike-out. I have described the scale of the hacked data and the nature of the material. As Ms Page KC and Mr Hirst put it in their skeleton argument, the material in the defendants’ possession enabled them to “rove through several years of the claimant’s day-to-day communications on all aspects of her life with those closest to her”. The quantity of data was enormous and much of it was of the most personal and intimate kind. It is unnecessary for me, at this stage, to venture possible figures for the damages that would be payable in the event that the claimant was successful (in whole or in part). Master Fontaine has already noted that the claim would appear to represent “a very serious breach of her private information” and that damages in an MPI claim in the High Court “may be very different from such a claim made in the Employment Tribunal”. The components of those damages would reflect (a) the claimant’s loss of control of her private information, (b) her distress and (c) aggravated damages. That could yield an award of many thousands of pounds. Further, even though the defendants have stated that they do not oppose the non-monetary relief sought, a court award would vindicate the interference with her rights and that is in itself a tangible and legitimate benefit which she is entitled to pursue. The claimant’s costs budget is, I acknowledge, high; (it is in excess of £800,000). But (a) that budget includes the costs to be incurred in defending a counterclaim which the defendants value at several hundreds of thousands of pounds, (b) the costs have not yet been subjected to costs management and (c) I do not, in any event, regard them as so disproportionate to the issues at stake in the claim as to bring this case within the territory of a Jameel abuse argument…

50. In a footnote to his judgment, Master Davison referred to Gulati v MGN [2015] EWCA Civ 1291 , in which the Court of Appeal upheld first instance damages awards of between £55,000 and £110,000 for acts of unauthorised accessing of voicemails, before any adjustment for aggravated damages, with additional damages awards for each act of disclosure of the information to the public.

51. Permission to appeal from Master Davison was refused, first on paper and then (on 3 May 2023) in a hearing before Mr Justice Griffiths. After a good deal of further procedural skirmishing, the MPI claim and the Defendants’ counterclaim finally settled on confidential terms on 1 July 2024, one day before trial (estimated at six days) was due to begin. The settlement was embodied in the consent order of that date, under the terms of which the Defendants must pay the Claimant’s costs. Offers

52. On 15 October 2020 the Claimant made a Part 36 offer to settle the MPI claim for £10,000, the Counterclaim to stand as dismissed and the Defendants to undertake not to publish, disseminate or retain any information derived from the Claimant’s WhatsApp messages.

53. On the same date, the Claimant made a “Without Prejudice Save as to Costs” offer to the effect that if the Part 36 offer were accepted within the Relevant Period, the Claimant would waive her costs of the Counterclaim.

54. On 4 November 2020, the Defendants put forward a "Without Prejudice Save as to Costs” offer to settle the Claimant’s (“further malicious and vexatious”) claim (“once and for all, but not our clients’ counterclaim”) for the sum of £101, on condition the Claimant pay the Defendants’ costs on the standard basis. It was rejected by the Claimant as (according to the narrative to the Claimant’s bill of costs) being wholly unrealistic and not representative of a reasonable level of damages in respect of the MPI claim.

55. The Claimant’s October 2020 Part 36 offer was withdrawn on 12 January 2023, the day after Master Davison’s judgment.

56. The Defendants’ £101 offer was repeated on 19 June 2024, less than two weeks before the date set for trial, this time on the basis that the Claimant pay 50% of the Defendants’ costs of the claim and the counterclaim. The amended offer was rejected, but it opened a process of negotiation that led to settlement.

57. Mr Mallalieu (relying, I suspect, on a description in the Claimant’s bill of costs) submits that the Defendants’ November 2020 offer encompassed not only the Claimant’s MPI claim but a counterclaim pleaded at over £400,000. Given the wording to which I have referred, that is not how I read it. The Defendants’ 19 June 2024 offer did however extend to the counterclaim. The CFA Information Provided by the Claimant

58. Before I turn to the terms of the Taylor Hampton, Page and Hirst CFAs I need to mention that the information provided in the Claimant’s bill of costs as to their material terms is not correct in every detail.

59. In respect of the Taylor Hampton CFA the bill omits to mention the specific provision, within Taylor Hampton’s success fee staging, for a hearing of preliminary issues. As a complete summary had been included in the Letter of Claim, both parties were aware of the correct position when I heard their submissions.

60. In respect of the Page and Hirst CFAs, the bill of costs indicates that both risk assessments confirmed that there had been material developments affecting the assessment of risk since the Taylor Hampton CFA had been signed. This is true of the Page CFA but not of the Hirst CFA which, albeit signed a day earlier, states that there have been none (the wording of each risk assessment is set out below).

61. I drew the attention of the parties to this apparent anomaly when this judgment was circulated in draft, and neither party wished to make any further submissions in relation to it. The Taylor Hampton CFA

62. The Taylor Hampton CFA provides that Taylor Hampton will only be paid their basic charges and success fee in the event of a “Win”, defined as follows: “Your claim is finally decided in your favour, whether by a Court decision or an agreement to pay you damages or in any way that you derive benefit from pursing the claim, provided that the level of any damages that you receive (disregarding any set-off if applicable) is above Minimal Damages (as defined within this Agreement).”

63. “Minimal damages” is defined as £3,000. Disbursements are payable in any event.

64. The CFA also incorporates provision for formal settlement offers: “It may be that your opponent makes a Part 36 offer or payment which you reject on our advice, and your claim goes ahead to trial where you recover damages that are less than that offer or payment. If this happens we will not seek from you any of our fees for work done by us after the `relevant period' for accepting the Part 36 offer or payment has expired...”

65. Taylor Hampton’s success fee is set as a percentage of basic charges, structured in this way: “1. 35% if the claim settles before the issue of the Claim Form

2. 50% if the claim settles after the issue of the Claim Form but before service of the first Defence served by an opponent

3. 75% if the claim settles after the service of the first Defence served by an opponent

4. 85% if the claim settles after the exchange of standard disclosure

5. 100% if the claim settles on a date after 45 days before the trial window, or on a date after 45 days before the first day listed for trial (whichever is sooner), or if the claim proceeds to trial. save when a hearing of preliminary issues is directed which is capable of determining the claim. In such an instance, the success fee is set at the percentage specified by stage 5 above of basic charges if the claim settles on a date after 45 days before the first day listed for any such hearing or if the claim proceeds to a hearing of preliminary issues which are capable of determining the claim. ”

66. The stage 5 success fee is (and, by implication, the stage 1-4 success fees are) supported by the following risk assessment: “ i. Litigation is always uncertain and there is never a 100% prospect of success (generally, even the most straightforward of cases, the maximum prospect of success is 80% at best). In this claim, which is not by any means a `straightforward' claim, the prospects of success are lower generally, in addition to which there are a number of other risk factors that reduce the prospects of success still further. ii. The terms of the Agreement are such that a "Win" is defined within the Agreement as the recovery of a minimum level of damages. That being the case, if an amount of damages is awarded or agreed that is below the minimum amount (calculated to be above what would be considered a `nominal' amount and above a low award of damages for this type of claim), it will not be considered a "Win" under the terms of the Agreement and so presents a significant additional risk that the firm will be unable to recover its costs. iii. The claim at present is inferential/circumstantial. We are attempting to obtain documentary evidence that supports the claim but until such time, you cannot conclusively show that the user of the WhatsApp desktop app was the Opponent. In the absence of technical digital evidence from WhatsApp (which has not been obtained to date), you cannot demonstrate conclusively, as an incontrovertible fact that the Opponent had unauthorised access to your WhatsApp account. The Opponent has already sought to argue in the Employment Tribunal proceedings that such material was passed to the Opponent by an anonymous third party. iv. The opponent is likely to take every step to delay this matter. This is especially the case given the impending trial in your employment tribunal claim. v. This firm has entered into this Agreement at a very early stage, and has to spend time on this matter, when it is entirely speculative whether or not there is a viable civil claim against the opponent. vi. The opponent is likely to have covered their tracks, and is unlikely to have preserved all disclosure relevant to your claim. By way of example, the opponent has already confirmed in correspondence exchanged in relation to your Employment Tribunal claim that much of the CCTV footage relevant to your claim is no longer available. vii. We may not be able to obtain disclosure from WhatsApp in order to substantiate your claim. Given the passage of time that has elapsed, there is a real risk that WhatsApp may no longer be in a position to disclose relevant evidence. viii. The Judge may make a finding at trial that notwithstanding your private information has been unlawfully intercepted, it was justified in the circumstances as your opponent required such evidence to prove that you were in breach of your employment contract and accordingly may decide to award only nominal or no damages. ix. The Judge in your Employment Tribunal claim may make adverse findings in relation to your character or conduct, for example in relation to your credibility as a witness, which the Judge in this claim may take into account. x. To date, the police have been unable to supply you with documentary evidence relating to the unlawful interception of your personal WhatsApp account. xi. Given the aforesaid matters, and the fact that the prospect of there being a civil claim is wholly speculative, it is impossible to quantify the prospects of success. It is possible that further information is revealed that means a civil claim will have 0% to 20% prospect of success, it is possible that further information is revealed that means that a civil claim will have an 80% prospect of success, or somewhere along that spectrum. In these circumstances, the degree of risk is at best 50/50, meriting an uplift of 100%.” The Hirst CFA

67. The Hirst CFA provides that Mr Hirst be paid his normal fees and success fee only in the event of success (defined to mean the same as “Win” in the Taylor Hampton CFA). It provides for formal settlement offers in the following terms, which have the same effect as those of the Taylor Hampton CFA: “If the amount of damages and interest awarded by a court is less than a Part 36 payment into Court or effective Part 36 offer made by the opponent then... if Counsel advised its rejection he is entitled to normal and success fees for work up to the expiration of the time period for acceptance of the notice of Part 36 payment into Court or offer but no fees thereafter unless an order for costs is made in the client's favour for work undertaken during this period… ”

68. Mr Hirst’s success fee is structured in the same way as Taylor Hampton’s, albeit without Taylor Hampton’s provision for a 100% success fee in the event of a decisive preliminary issues hearing. It includes, expressly, that 0% relates to the cost of postponement of the payment of counsel's fees (Taylor Hampton have confirmed, in their formal Replies to the Defendants’ Points of Dispute, that the same applies to their agreement).

69. The success fee is supported by the following risk assessment: “1. If the Client loses the claim Counsel will not earn anything.

2. If the Client wins, Counsel will not be paid until the end of the case.

3. Counsel's assessment of the risks of the claim, including the factors in the solicitor's assessment of the risks of the claim, as set out in the Risk Assessment attached to the Conditional Fee Agreement between the client and Taylor Hampton dated 30 January 2019… with which counsel agrees.

4. Since that date no material developments have occurred which may affect the assessment of risks in this case.

5. In addition, the following additional points have been taken into account in Counsel’s risk assessment…[no extra points]… The evidence provided by the client discloses compelling evidence of misuse of private information in the form of unlawful (civilly and criminally) interception of WhatsApp communications without the knowledge or authorisation of the client. The information in question, and the mode of communication, a personal WhatsApp account, will attract a reasonable expectation of privacy and the protection of Art 8 ECHR. Messages were about sex, personal finance, relationships and conduct of litigation. Court ought to find reasonable expectation of privacy. As to the balancing exercise, there do not appear to be reasonable justifications for accessing the information, which was not contained in any work-related files or accounts, such as work email. At the time interception commenced there was no live disciplinary of other work-related issue which would justify monitoring and access. Opponents had enough to dismiss client in Dec 2017 based on inaccurate time recording for clients, and did not need to review all her personal communications. There was no threat to the business posed by client. Even had the messages been discovered on a work computer, which client denies and for which there is as yet no evidence, without a case on proportionality, prior concerns, or risk assessments, the obviously private nature of WhatsApp accounts should have warned against access as entirely disproportionate (Barbulescu v. Romania (application no. 61496/08), Grand Chamber, ICO guidance). Client denies using WhatsApp desktop software on work computers or anywhere and denies accessing her WhatsApp account through WhatsApp Web, providing clear of evidence that it was installed since Nov 2017. Whilst advancing a plausible explanation for the totality of the private material her opponents relied upon in their employment tribunal defence will be difficult for them, one weakness in client's position is that she cannot conclusively show that the user of the WhatsApp desktop app was the opponents. For example, in the absence of the technical digital evidence from WhatsApp (which has not been obtained to date), client cannot show as incontrovertible fact that the opponents had unauthorised access, but simply that someone who passed them the data did. Whilst most unlikely, there may prove to be other ways in which WhatsApp desktop client had been set up by some other third party or WhatsApp Web accessed (it is something that jealous partners might do), and material passed to opponents by third party route. The opponents already seek, implausibly, to argue this—their case is hard to sustain on the evidence of very large quantities of messages being disclosed. The opponents ought to be able to give a variety of disclosure and further information about how the received the intercepted material, much of which will be susceptible to digital forensic interrogation. This relates to documents and devices preserved in respect of the Employment Tribunal litigation. If not produced by the opponents, the Court would be entitled to draw inferences against the case that the privacy material was "found" on a computer or handed to them by a wellwisher source. There is a risk that the passage of time will mean that WhatsApp are no longer able to disclose relevant evidence of responsibility. There is a risk that the opponents will evade their disclosure obligations. Nor does the invasion of privacy receive subsequent justification by use of the material in litigation. No litigation was in prospect when access was first established, i.e. no disciplinary issue was raised until 13 Dec 2017. lmerman v Tchenguiz [2011] Fam. 116 strongly suggests that privacy material should be passed to lawyers acting for persons in client's position, but not reviewed by opponents in litigation, to safeguard privacy and privilege issues. The absence of definitive evidence of misuse of private information by named opponents places some risk around the claim, but does not diminish prospects of success below 50%, and is counterbalanced by a weight of compelling circumstantial evidence, much of it based on documents, and the prospect of obtaining better evidence from WhatsApp (Facebook Inc), potentially. The appropriate percentage to reflect prospects of success is 51-55%. The recent dismissal of the client's claims in the Employment Tribunal taints her credibility as a witness. However, this claim focuses on the credibility of the opponents' explanations that they have not hacked. The client's allegation that there has been hacking cannot be dismissed on the available evidence as a bad faith fabrication. Indeed, the opponents case currently corroborates that there has been hacking, albeit his case is that he is not the responsible party. There appear to be few if any disputes of fact which require to be resolved in this privacy claim which will engage the question of the client's credibility against the opponents' credibility. Rather the question of the opponents' credibility will be measured against other available evidence.” The Page CFA

70. The Page CFA is in all material respects the same as the Hirst CFA, save that the Risk Assessment, from paragraph 4 onwards, reads: “4. Since that date material developments have occurred which may affect the assessment of risks in this case. Therefore the following additional points have been taken into account in Counsel's risk assessment: a) At the date of this CFA being entered into, things have moved on since agreement between the client and Taylor Hampton dated 30 January 2019 because the Client has lost her employment tribunal claim and been found to have told lies and given false evidence. To the extent that success in this claim depends upon the Client's credibility, that credibility has been destroyed. b) It has also become apparent that the unauthorised access to the Client's WhatsApp account was not (or was unlikely to have been) through a desktop app. This emphasises the high degree to which the prospects of success rely upon conjecture and inference at this stage, unless and until disclosure from WhatsApp and the Opponent reveals concrete evidence of the unlawful interception of the Client's WhatsApp account. c) In the event that the WhatsApp disclosure is forthcoming and favourable to the client, the client's prospects of success will likely significantly increase…” Assessment of Success Fees: the Rules

71. As a general rule, success fees have not been recoverable under orders for costs since 1 April 2013, with the exception of success fees payable under “pre-commencement funding arrangements”, the recoverability of which is preserved by transitional provisions. The Taylor Hampton, Hirst and Page CFAs are all pre-commencement funding arrangements.

72. CPR 48.1(1) provides: “The provisions of CPR Parts 43 to 48 relating to funding arrangements, and the attendant provisions of the Costs Practice Direction, will apply in relation to a pre-commencement funding arrangement as they were in force immediately before 1 April 2013...”

73. The pertinent provisions of the pre-1 April 2013 the regime are at paragraph 11 of the pre-April 2013 Costs Practice Direction: “11.7 When the court is considering the factors to be taken into account in assessing an additional liability, it will have regard to the facts and circumstances as they reasonably appeared to the solicitor or counsel when the funding arrangement was entered into and at the time of any variation of the arrangement. 11.8(1) In deciding whether a percentage increase is reasonable relevant factors to be taken into account may include: a) the risk that the circumstances in which the costs, fees or expenses would be payable might or might not occur; b) the legal representative’s liability for any disbursements…”

74. In this particular case, all disbursements (subject to the provisions of the Hirst and Page CFAs) remained the responsibility of the Claimant.

75. CPR 44.3(2) provides that, on an assessment on the standard basis, costs will only be allowed to the extent that they are reasonably incurred, reasonable in amount and proportionate, with any element of doubt to be resolved in favour of the paying party. This includes success fees.

76. As for proportionality, in BNM v MGN Ltd [2017] EWCA Civ 1767 the Court of Appeal confirmed that the proportionality test applicable from 1 April 2013 does not apply to a pre-commencement funding arrangement. The pre-April 2013 proportionality test continues to apply. As Mr Mallalieu accepts, it follows (by reference to pre-April 2013 authorities) that proportionality is of limited if any relevance for the purposes of assessing the success fees recoverable under the Taylor Hampton, Hirst and Page CFAs.

77. In summary, I am to assess the success fees recoverable under the Taylor Hampton, Hirst and Page CFAs as if they had been entered into before 1 April 2013. They will be assessed by reference to the facts and circumstances of the MPI claim at the time each CFA was actually entered into. The question will be whether they are reasonable in amount. I will (in accordance with paragraph 11.8 (1) of the pre-April 2013 Costs Practice Direction and C v W [2008] EWCA Civ 1459 ) be assessing reasonableness by reference to the risk, as at the relevant time, of Taylor Hampton and counsel going wholly or partly unpaid for their work. The Points of Dispute and Replies

78. In their Points of Dispute the Defendants characterise Taylor Hampton’s and counsels’ success fees as unreasonable.

79. I will not recite here all of the issues raised in the Points of Dispute and the Claimant’s replies, many of which are covered by submissions to which I will refer, but I will summarise, as briefly as I am able, Points and Replies which extend to about 10 pages on this issue alone. This is characteristic of this detailed assessment, in which the combined Points of Dispute and Replies run to some 170 pages.

80. The Defendants rely upon Drake v Fripp [2011] EWCA Civ 1282 and C v W (referred to in more detail below). They refer to the fact that Taylor Hampton was instructed in October 2018, but did not enter into a CFA until 30 January 2019, and they contend that the Claimant from the outset had a “very strong inferential claim against the defendants” to the effect that they must have hacked the Claimant’s phone, and the burden had shifted to the Defendants to show how they could have come into possession of the WhatsApp evidence without doing so.

81. The Defendants argue that the Claimant’s prospects of recovering a substantial amount, as at 30 January 2019, in a claim pleaded at £100,000, were extremely high. That was because, by whatever means the Defendants had obtained the WhatsApp evidence, they had read it and breached her privacy by doing so rather than passing them on read to her solicitors. It follows that there was no need for her to prove causation or liability. Delay was not a real risk factor, and any evidence from WhatsApp was otiose. Nor, “as there was no unlawful interception”, could the police ever have obtained any documentary evidence.

82. Based purely upon the fact that the Defendants have had access to and read the Claimant’s personal WhatsApp messages, many of which predated her employment, the Claimant (the Defendants say) had an 80%-90% prospect of recovering damages above £3,000.

83. The Points of Dispute refer to the offers made by the parties in the course of litigation, suggesting that the Claimant’s offer, and her refusal of the November 2020 offer from the Defendants, demonstrate confidence in the case.

84. The Claimant, in her Replies, refers to Callery v Gra y [2001] EWCA Civ 1117 and Ku (or U ) v Liverpool City Council [2005] 1 WLR 2657 in support of the proposition that a high success fee, set for a late stage of the proceedings, can be justified as part of a structured success fee. She makes the point that the Defendant had the option to explore early settlement and achieve a significant discount to the success fee, but chose instead to contest it and to take a “bullish and robust stance” all the way to trial.

85. The Risk factors set out in Taylor Hampton’s and counsels’ risk assessments were, says the Claimant, appropriate and the prospects of success “extremely low”.

86. The Claimant was aware, from the conduct of the Defendants when the appropriate treatment of the WhatsApp evidence was still a live issue before the ET, that the Defendants would strongly deny any liability. Of course liability had to be proved when the Defendants denied it (and in fact demanded disclosure of electronic evidence which would prove the Claimant’s case). The “hacking” allegation was strongly denied (and continued to be strongly denied to the trial of the MPI claim).

87. Delay, says the Claimant, was a key risk factor. It increased the possibility that Defendants might not have the means to compensate the Claimant (reference is made here to bankruptcy proceedings against the first Defendant) and that evidence could go missing over time (as it did).

88. The Claimant’s Part 36 offer did not guarantee a successful claim. There was a real possibility that the Claimant would receive only nominal damages, and the position of the Defendants throughout the proceedings was that that was all that she could achieve. Evidence from WhatsApp and the police would have supported the Claimant’s case, and there was a real prospect that no such evidence would be forthcoming (as proved to be the case).

89. The Claimant contrasts the position taken by the Defendants now with the minimal offer made by the Defendants in November 2020 and the robust position taken by them throughout the litigation, to the effect that the Claimant was unlikely to succeed and even if she did, would obtain only minimal compensation. She argues that the Defendants must have believed that they had a robust defence to the claim. If, as they now say, the Claimant was almost certain to receive substantial damages the Defendants would have taken the precaution of making a reasonable Part 36 offer. Further, the Defendants could (and in due course did) attack the Claimant’s credibility in order to undermine her claim. Authorities on the Assessment of Success Fees

90. Some of the authorities to which I am about to refer make reference to the “Ready Reckoner”. The Ready Reckoner is a table which calculates an appropriate CFA success fee for a given level of risk. The formula behind the Ready Reckoner is based on the proposition that success fees in successful CFA cases must be sufficient to compensate the legal representative for the unsuccessful cases (see Cook on Costs 2025, paragraph 4.22). The Ready Reckoner has been widely accepted (by the judiciary as well as the legal profession) as an appropriate tool for assisting in the calculation of a reasonable success fee.

91. The maximum success fee shown in the Ready Reckoner is 100%, which reflects a prospect of success of 50% and is the maximum success fee permitted by law in any kind of CFA.

92. I have already referred to the Claimant’s reliance on Callery v Gra y and Ku v Liverpool City Council [2005]. Both are referred to below, but I set out here an extract from paragraph 57 of the judgement of the Court of Appeal in Ku v Liverpool City Council , upon which Mr Mason for the Claimant has placed particular emphasis: “… costs judges should be more willing to approve what appear to be high success fees in cases which have gone a long distance towards trial if the maker of the CFA has agreed that a much lower success fee should be payable if the claim settles at an early stage…”

93. Mr Mason has also placed some emphasis on a summary of authorities and principles offered by Master Campbell in Matthew Peacock v MGN Ltd Sir Stephen Stewart [2010] EWHC 90174 (Costs) . I will not repeat it here, because (intending no disrespect whatever to Master Cambell’s lucid judgment) it has been superseded by a more up to date and authoritative summary by in Chocken v Oxford University Hospitals NHS Foundation Trust [2020] EWHC 3269 (QB) , to which I shall refer.

94. The essential point about Master Campbell’s judgment in Peacock is that it supports the proposition that, in a staged success fee, an increase to 100% may be justified by the service of a defence indicating that the defendant must believe that it has a realistic chance of the defence succeeding.

95. With regard to Drake v Fripp , the pertinent passage is I believe paragraph 21 of the judgment of the Master of the Rolls: “ I believe that there may be a regrettable, if understandable, tendency to charge the maximum success fee of 100% in every case. The client with whom the fee is negotiated by the lawyer has no interest in the level of success fee (at least in a case such as this, where he has to pay no more than he is entitled to recover from the paying party), and the lawyer has an obvious and strong interest in the success fee being as high as possible. In many cases, it is easy for a lawyer, acting in complete good faith, to persuade himself that the prospects of his client’s case succeeding are no better than 50% when it is in his interest to do so, and when he has no negotiations with the party who will or may have to pay the success fee. The court has a particular duty, therefore, to be vigilant in considering the reasonableness of the level of success fee agreed, but, as I have said, this does not mean that the court can invoke the wisdom of hindsight or should adopt an unduly harsh approach.”

96. This takes me to the summary of relevant authorities and the distillation of the relevant principles offered by Stewart J at paragraphs 18-25 of his judgment in Chocken . I have taken the liberty of trimming his full analysis slightly, to focus on what is most pertinent to this particular case: “18. In Callery the court considered success fees in the context of high-volume low value road traffic claims. The court referred to an example of staging a success fee at the end of the relevant protocol period, since many such claims settle within that period and there should be a response from insurers as to whether liability was disputed. The court said: ‘84. We are in this case concerned with such a category of claims: claims for the consequences of a motor accident where, on the claimant’s account of the accident, the solicitor reasonably concludes that the claim has every prospect of an early settlement as to both liability and quantum. At that stage the risk assessment that results in the determination of the uplift is likely to turn, not on peculiar features of the instant case – for there will be none – but on his experience that in a small minority of such cases, when the claim is pursued some unforeseen circumstance results in the ultimate failure or abandonment of the claim …

108. The logic behind a 2-stage success fee is that, in calculating the success fee, it can properly be assumed that if, notwithstanding the compliance with the protocol, the other party is not prepared to settle, or not prepared to settle upon reasonable terms, there is a serious defence. By the end of the protocol period, both parties should have decided upon their positions. If they are prepared to settle, they should make an offer setting out their position clearly and providing the level of cost protection which they determine is appropriate.’

19. In Atack v Lee [2004] EWCA Civ 1712 ; [2005] 1 WLR 2643 the Court of Appeal said this in relation to the matrix prepared by the claimant’s solicitor in assessing the risk of litigation for entering into the CFA: ‘37. This case has the curious feature that the matrix prepared… which should have been useful in revealing his reasonable thought processes when assessing the risk of litigation, was of no value at all, so that the deputy district judge was right to consider the matter from the standpoint of a reasonably careful solicitor assessing the risk on the basis of what was known to the claimant’s solicitor at the time.’

20. The principle of not using hindsight was underlined in U . This was a tripping case where the following extracts are particularly relevant: ‘20. When a court has to assess the reasonableness of a success fee it must have regard to the facts and the circumstances as they reasonably appeared at the time when the CFA was entered into: see para 11.7 of the Costs Practice Direction and Atack v Lee … para 51. The principle that the use of hindsight is not permitted when costs are being assessed is an old one …

21. … When deciding upon a success fee he had two choices. He could have taken the view that this claim would probably settle without fuss at a reasonably early stage, but he wished to protect himself against the risk that the claim might go the full distance and might eventually fail. In those circumstances he could select the 2-stage success fee discussed by this court in Callery v Gray … paras 106–112. In this situation he would be willing to restrict himself to a low success fee if the case settled within the Protocol period – or within such other period, perhaps until the service to the defence, as he might choose – and to have the benefit of a high success fee for the cases that did not settle early. As things turned out, he would have benefited on the facts of this case if he had adopted this course: a high two-staged success fee would have been more readily defensible in a case which did not settle until proceedings were quite far advanced.

22. Alternatively, he could have selected, as he did in fact, a single-stage success fee, being a fee which he would seek to recover at the same level however quickly or slowly the claim was resolved. In those circumstances it would not be possible to justify so high a success fee.’

21. In Matthews v Metal Improvements Co Inc [2007] EWCA 215; [2007] CP Rep 27 the Court of Appeal reversed the lower court’s decision to allow the claimant costs up to the date of late acceptance of a Part 36 offer, on the basis that there were reasonable grounds for the claimant initially to reject the payment. At [33] the court said that the judge’s approach had been based on a misunderstanding of a function of a Part 36 payment or offer. The paragraph finishes by saying that “the function of a Part 36 payment is to place the claimant on that costs risk if, as a result of the contingencies of litigation, he fails to beat the payment”.

22. In C v W [2008] EWCA Civ 1459 ; [2009] 1 Costs LR 123 the Court of Appeal considered assessment of the appropriate success fee entered into between the claimant and her solicitor at a time when the defendant had already admitted liability. The Court of Appeal upheld a success fee of 20% where, apart from general litigation risks, the only risk facing the recovery of costs was that of failing to beat a Part 36 offer…

23. In Fortune v Roe [2011] EWHC 2953 (QB) ; [2012] 2 Costs LR 288 , the court was concerned with a situation where the CFA was signed when liability was no longer in dispute. The CFA nevertheless provided for a success fee of 25% if the claimant won her claim prior to three months before the trial date/trial window or 100% if she won her case at any later date. The Master found that the high value and complexity of the case could only bear upon the risk of failing to beat a Part 36 offer, but even if that happened the costs up to date of the offer would have been recoverable and only those incurred after that date would have been payable to the defendant. He accepted the defendant’s submission that the possibility of failing to beat the Part 36 offer in the circumstances carried a risk which could be assessed at a 20% success fee. The Master’s decision was upheld on appeal. Sir Robert Nelson said this: ‘46. It is correct that the courts have encouraged a two-stage success fee such as in Callery and U but that in itself does not assist the appellant. The question still remains as to what the level of risk was and what success was justified. The mere fact that a two-stage fee is in place does not mean that the second stage fee, closer to trial, can always be justified.' Later the judge said the central issue in the appeal was what was the risk when the CFA was signed and what would be a reasonable fee in such circumstances.

24. In Bright v Motor Insurers’ Bureau [2014] EWHC 1557 (QB) ; [2014] 4 Costs LR 643 the claimant suffered serious injury in a road traffic accident. The Master reduced the staged success fee from 75% to 30%. The court held that that decision had been correct. The fact that the defendant would have been hard pressed to contest liability was amply supported by what was known at the time of entering the CFA. The court said this, after reviewing the authorities: ‘49. A two stage success fee may be used by a solicitor “to protect himself against the risk that the claim might go the full distance” ( U v Liverpool para 21). As Master Campbell held in Matthew Peacock v MGN Ltd… it is open to the claimant to choose the date of staging. The claimant must be in a position to justify the percentage uplift for success fees. If, therefore, he elects an early trigger for a higher second stage success fee, he must be in a position to justify the higher risk of non-recovery of his fees at an earlier stage than if the second stage were only reached at or shortly before trial.

50. … The trigger point of the second stage of a success fee is not the principal basis for determining its reasonableness. What is material is whether the success fee is set at such a level which is reasonable in light of the risk of non-recovery of costs anticipated at the date of entering into the CFA.’

25. From the authorities the following can be said: i) When the court assesses the reasonableness of the success fee it must have regard to the facts and circumstances as they reasonably appeared at the time the CFA was entered into and not with any hindsight. U [20] ii) The solicitor’s assessment of the risk of the litigation should be useful in revealing the thought processes of the risks. It is a matter for the court to consider the matter from the standpoint of a reasonably careful solicitor, assessing the risk on what was known at the time of entering the CFA. Atack [37] iii) The logic in a two-stage success fee is based on whether the other party is not prepared to settle, or not prepared to settle on reasonable terms, such that there is a serious defence. There is no set point for the triggering of a stage in a staged success fee. Callery [108]; U [21] iv) The value/complexity of the litigation does not increase the risk of losing, though there may be a higher number of pitfalls in such cases. It is difficult to assess the risk of beating a Part 36 offer, but the courts have upheld 20%–25% success fees in such circumstances. C [15]–[23]; Fortune . v) A staged fee agreement does not always justify a higher success fee closer to trial. The question is what was the level of risk justifying the success fee at the time the CFA was signed. Fortune [46] and [48]. vi) It is open to the claimant to choose the date of staging. He must be able to justify the percentage uplift. If he elects an early trigger for a higher second stage success fee, he must be in a position to justify the higher risk of non-recovery of fees at an earlier stage than if the second stage were only reached at or shortly before trial. It is not therefore the trigger point which is the principal basis for determining reasonableness, but whether the success fee is set at such a level which is reasonable in the light of non-recovery of costs anticipated at the date of agreeing the CFA. Bright [49]–[50]”.

97. Chocken concerned a success fee in three stages: 50% if the claim concluded before service, 80% if it concluded not less than 45 days before the date set for trial, and 100% if it concluded at any point thereafter. The claim settled at the second stage. Stewart J upheld a Cost Judge’s refusal to allow a success fee of more than 50% on the basis that the service of proceedings did not, on the facts of the case as known at the time that the relevant CFA was entered into, represent an increased level of risk.

98. As to the submission that the Cost Judge’s approach was inconsistent with Callery and U (a case of personal injury caused by stepping into a hole on the defendant’s property), Stewart J said this, at paragraphs 42 and 43 of his judgment: “42. The context of the statement at [108] of Callery was bulk issue low value road traffic claims. At [102] the Court of Appeal said this: ‘It should be recognised that any general guidance that we provide is given in the context of the type of claims which are the subject of this appeal, that is to say, modest and straightforward claims for compensation for personal injuries arising from road traffic accidents …’ Low value RTA claims overwhelmingly settle. One has to be cautious about relying too heavily in a clinical negligence case on what would or would not be regarded as a “serious defence” in a small RTA claim.

43. Nor is this present case within the matrix of U at [21], which refers to a low success fee if a case settles within the Protocol period or perhaps until service of defence (as the claimant’s solicitor might choose), and a high success fee for cases that do not settle early. 50% is not a low success fee. It is the equivalent on the “ready reckoner” of there being approximately one third prospect of total failure of the claim.” The Defendants’ Submissions

99. Mr Mallalieu argues that under the Taylor Hampton CFA if, for example, the Defendants were to (as in fact they did) issue a strike out application or summary judgment application in response to the issue of the claim, that would fall within the provisions of the Taylor Hampton CFA for determination of the claim on preliminary issues. The 100% success fee would apply from 45 days before the making of that application, even though the burden on the Defendants would be much heavier.

100. At the time of their CFA, Taylor Hampton knew (as counsel will also have known at the time of their CFAs) that the Defendants were in possession of a substantial volume of her personal information from her WhatsApp account; that the information that the Defendants were in possession of included highly personal information relating to her sex and private life; that the Defendants had read some or all of that information; and that the Defendants had deployed that information and intended to continue to do so in the ET.

101. As the Letter of Claim demonstrates, at that time the following facts had been established.

102. The Defendants’ Grounds of Resistance before the ET relied on and used substantial parts of a log (of over 400 pages) of all WhatsApp messages exchanged between the Claimant and her boyfriend between 17 January 2017 and 21 December 2017 and over 350 pages representing an incomplete section of the log of the Claimant’s exchanges with others.

103. Inspection of the log demonstrated that the Defendants had had full access to the Claimant’s private communications with her boyfriend spanning almost a two year period.

104. That information included matters of a personal and intimate nature in which the Claimant would have a reasonable expectation of privacy.

105. Much of what followed focused on arguments about how the material had come into the Defendants’ possession (whether it had in part been on the Claimant’s work computer and in part had been sent to the Defendants by an anonymous person without invitation, or whether the Defendants obtained it by surreptitious and unlawful means). That might have been relevant to the measure of recoverable damages. The real point however, when it came to calculating the prospects of achieving success under the Taylor Hampton CFA, was that it was not in issue that the Defendants had such information in their possession, and had used it.

106. The Claimant had two further, forceful points available to her. The first was that even if the information had come into the Defendants’ hands through legitimate means, the proper use of it was to pass it to the Claimant’s solicitors without more, whereupon (to the extent relevant to the ET proceedings) the Claimant’s solicitors would have come under the usual disclosure obligations ( Imerman ) .

107. The second was that, even putting aside all other points, any interference by the Defendants (even if such interference was generally justifiable) had to be no more than was reasonable and proportionate. Even if the use of some parts of the Claimant’s WhatsApp messages could be justified by reference to the issues in the ET claim (and even if the Defendants should not have dealt with that in accordance with Imerman ), to defeat this claim the Defendants would have to justify as necessary and proportionate their retention and use of all of the information they had in their possession in respect of which the Claimant had a legitimate expectation of privacy.

108. The Claimant’s solicitors knew all these points. Hence the reference in the Letter of Claim to an “open and shut” civil claim for misuse of private information and offences under GDPR.

109. The Defendants accept that this still left a lot to argue about; that claimants will put forward their ‘best cases’ in Letters of Claim; and that the nature of the relationship between the parties to the MPI claim meant that the Defendants were likely to respond in robust and vigorous terms.

110. The use of the phrase “open and shut”, however, demonstrates a recognition on the part of the Claimant’s advisers that there was a core to the MPI claim where the effective burden was on the Defendants and that it was a burden that they would be very hard pressed to meet.

111. As to the risk assessment in the Taylor Hampton CFA, Mr Mallalieu (following the order of the stated risks) expands on the Points of Dispute with the following submissions.

112. The reference to litigation risk at the first paragraph adds nothing of substance. It is followed by an assertion, in effect, that claims will never have a better than an 80% prospect of success (and so, applying the “Ready Reckoner”, will always attract at least a 25% success fee) and that this case is riskier.

113. The risk assessment is set by reference to a definition of “win” that requires a minimum recovery of £3,000. In some cases setting a specific threshold of damages for a win could make a material difference to the prospects of success. Here, it does not. There is no explanation given for the £3,000 figure at all. If the Claimant won, she was almost certainly going to recover more than minimal damages (the claim when issued was issued for £100,000). Here, the reference to £3,000 added nothing. If the Claimant won, it would be immaterial. If she lost, it would be immaterial. The figure of £3,000 was, in effect, a cipher for the MPI claim failing entirely.

114. Anticipated delaying tactics by the Defendants were equally irrelevant. The risk to be addressed was the risk of non-payment, not the risk of late payment.

115. The “early” timing of the Taylor Hampton CFA, and the risk of the Defendants having “covered their tracks”, was of limited, if any, relevance where the burden was on the Defendants to justify their established use of information in which the Claimant had a reasonable expectation of privacy.

116. Before their CFA was signed, Taylor Hampton had had three months to consider the MPI claim, which had already been asserted as a viable claim in the ET and was only withdrawn (presumably on advice) so it could be pursued separately in the High Court. The Claimant could have had the issue disposed of in the ET, but was presumably advised it was in her interests to pursue separately. That does not ring well as being described as an ‘entirely speculative’ claim, in which the solicitor will, as at the date of the CFA, have had a detailed draft Letter of Claim ready to send the next day.

117. Paragraph viii) of the risk assessment addressed the real core issue for the purposes of calculating prospects of success. That was whether the Defendants would be able to justify their use of all of the information as a necessary and proportionate interference with the Claimant’s rights to privacy. Taylor Hampton’s risk assessment says only that the Judge ‘may’ make a finding to that effect and ‘may’ award only nominal or no damages. The fact that comes eighth in the list of risk factors, and is given little explanation or reasoning, illustrates that this was, (rightly) not perceived to be a risk of any real substance.

118. It was correct that the ET might make adverse findings as to the Claimant’s character. That was not of any real relevance (hence both Mr Hirst and Ms Page subsequently adopting Taylor Hampton’s risk assessment and success fee even after the ET judgment, and the ET judgment making no difference to the Claimant’s pursuit of her claim). A reasonable solicitor, in February 2019 would have appreciated this.

119. Nor did the potential ability of the police or WhatsApp to supply information as to the nature and source of interference with the Claimant’s WhatsApp account, have any real bearing on the prospects of success.

120. No specific reference is made to Part 36 risk, suggesting that Taylor Hampton rightly did not attribute any real risk to it. This was not a C v W , standardised personal injury Part 36 risk type case.

121. The Part 36 clause in the three CFAs only applied where a rejected Part 36 offer was not bettered “at trial” (the Taylor Hampton CFA) or where damages were “awarded” by the court (Counsels’ CFAs). It would not have applied if, for example, a later settlement was achieved whereby the Claimant was deprived of some costs.

122. Taylor Hampton was aware of the extensive history between the parties and that the Defendants would be very reluctant to make any substantial offer to the Claimant. Moreover, for the Part 36 risk to eventuate, Taylor Hampton and leading and junior counsel, all highly experienced, would have to give advice which essentially misjudged the acceptability of a Part 36 offer and the Claimant, a solicitor herself, would have to accept that advice, carry on to trial without otherwise achieving a settlement, and fail to beat the offer .

123. The prospects of this, in a case of this kind, were negligible. This was not a personal injury case backed by a defendant insurer. It was not clear if the Defendants would make any offer, let alone one counsel perceived as putting the Claimant at risk. If the Defendants did, then if it genuinely put the Claimant at risk she would be likely to be advised to accept it, and to accept that advice. Even if counsel and solicitors misjudged it, the likely outcome would be some later resolution before trial. In all the circumstances, the Part 36 risk in this particular case was notional, not real, which would be why it was not given as a justification for the success fee.

124. Mr Mallalieu submits that Taylor Hampton’s risk assessment is, like that in Atack v Lee , so removed from the real risks as to justify this court taking its own view as to the risks as they would reasonably have appeared to a solicitor in January 2019.

125. Ms. Page KC, at the time of her CFA of 4 April 2019, did not appear to have had any material input into the MPI claim. She noted that the Claimants’ credibility has been “destroyed” and that it was now unlikely that access to the Claimant’s WhatsApp account had been obtained through a desktop app. Both of these points had been identified as material risk factors by Taylor Hampton to justify their success fee, but this did not prevent Ms Page adopting Taylor Hampton’s success fee and reasoning. The success of the MPI claim did not turn either on the Claimant’s credibility or on establishing the means by which the Defendants obtained the Claimant’s private information, but upon whether their use of it was proportionate. To the extent that those factors had any bearing at all, it was on the potential quantum of the claim, which was if successful certain to exceed £3,000.

126. Mr Hirst’s risk assessment, on 3 April 2019, like that of Ms Page, post-dated the Claimant’s Letter of Claim and the Defendants’ Letter of Response. In Mr Mallalieu’s submission it demonstrates that there was little prospect of the Defendants’ being able to justify their use of the Claimant’s private information, and explains why the damage to the Claimant’s credibility following the ET’s judgment did not materially affect the prospects of the MPI claim succeeding. It also demonstrates why Taylor Hampton’s description of the claim as “speculative” was wholly inaccurate.

127. Mr Hirst’s risk assessment noted “compelling evidence of misuse of private information”. He expressed no doubt that the information in question “will attract a reasonable expectation of privacy and the protection of Art 8 ECHR”.

128. Mr Hirst noted that, in respect of Stage 2, there “do not appear to be reasonable justifications” and that even access on a work computer would have been “entirely disproportionate”. He was clear in his view that the subsequent use of the information in the ET could not be an adequate justification. He also noted that the Claimant’s credibility was, essentially, irrelevant.

129. The risk factors identified by Mr Hirst were these.

130. The Claimant could not conclusively show that the Defendants had used the WhatsApp desktop application. Mr Hirst also however noted that the prospect of some other user was “most unlikely” and that the Defendants’ case in that respect would be “hard to sustain” given the large quantities of messages disclosed.

131. That passage of time might mean WhatsApp no longer had evidence of who obtained access or the risk that the Defendants might evade their disclosure obligations. M Hirst did not say how or why this would affect the overall prospects of success.

132. There was an absence of definitive evidence of Misuse of Private Information by “named opponents”, “counterbalanced by a weight of compelling circumstantial evidence” and “the prospect of obtaining better evidence from WhatsApp”.

133. Mr Hirst expressed no concern as to any risk that if the claim succeeded damages would only be minimal.

134. Mr Mallalieu suggests that Mr Hirst’s risk assessment does a better job of seeking to identify the relevant risks in this case than those of Taylor Hampton and Ms. Page KC’s, which do he suggests smack of the regrettable tendency identified by Lord Neuberger in Drake v Fripp .

135. The reality was that, as Mr Hirst noted, this was, in February and April 2019, already a case with compelling evidence of the misuse of private information. That the information existed and had been used was not in issue. As to the first stage, Mr Hirst’s view was that it was ‘obvious’ that the information was private. He did not express any doubt that it attracted a reasonable expectation of privacy.

136. As for the second stage of the MPI test, Mr Hirst was equally emphatic that he could see no adequate justification for the use made by the Defendants of the Claimant’s information, much less one that would extend to all of it. If he was right in his general assessment of risk, which excluded any quantum risk, then this was a claim that would either win or settle in the Claimant’s favour. It is also obvious from the tone and content of his risk assessment that he views the case extremely positively.

137. He then however placed the prospects of success at 50%-55%, so that the headline success fee matches Taylor Hampton’s 100%. Based on his other observations, that was not a reasonable, rational or sustainable conclusion. As at February or April 2019, the reasonable perception of a legal representative considering the risks their CFA exposed them to on the known and available facts of this claim would and should have been that this was a claim that was almost certain to succeed in a sum at least in excess of £3,000.

138. That was the case notwithstanding there were many issues beyond mere liability and minimal damages which meant that the claim might be very hard fought; and that, given the history between the parties, an early resolution was unlikely.

139. The 4 hours spent by Mr Hirst working with Taylor Hamilton between 19 December 2018 and 25 January 2019 includes a conference of between 3 and 3.4 hours on 9 January, when Taylor Hamilton, the Claimant and Mr Hirst went through the four lever arch files of the Defendants’ disclosure and discussed prospects and strategy.

140. The Claimant has not produced a record of that conference for the determination of the success fee issue, and Mr Mallalieu invites me to draw from that an adverse inference to the effect that any such record would not support Taylor Hampton’s counsel’s risk assessments. Mr Mallalieu also points out that Mr Hirst participated in the drafting of the Letter of Claim which described the Claimant’s MPI claim as “open and shut”: a description which, he suggests, reflects Mr Hirst’s risk assessment to the effect that the Claimant’s WhatsApp account did attract a reasonable expectation of privacy, and that it would be difficult for the Defendants, in respect of at least most of the evidence disclosed in the ET proceedings, to discharge the burden of demonstrating that their access to use made of that material evidence from that account was justified and proportionate.

141. The starting point for all three CFAs, should, submits Mr Mallalieu, have been a success fee in the region of 25%, reflecting prospects of success in excess of 75% (according to the Ready Reckoner, that success fee would in fact reflect a prospect of success of 80%). Had the Claimant’s legal representatives taken a reasonable approach, then it might have been possible that a marginally higher success fee could have been justified if balanced by a reasonable staged discount for earlier resolution. However, that was not done and staging cannot support a success fee that is unjustified and unreasonable on the facts. The Claimant’s Submissions

142. I approach with some caution Mr Mason’s submissions on the alleged conduct of the Defendants in the MPI claim, over the five year period between the Letter of Claim and settlement. The success fees in this case must be assessed by facts and circumstances as they reasonably appeared at the time of each CFA. They are not penalties for subsequent unreasonable conduct.

143. Whilst I appreciate that Mr Mason seeks to illustrate that the risk assessments in each CFA incorporated concerns as to the Defendants’ likely future conduct that were subsequently borne out, much of the detail offered by him in that respect seems to me to go further, and to invite me to fall into the error of exercising hindsight. This is not the right context for me to determine contested, post-CFA conduct allegations. I will address in my conclusions the extent to which the Defendants’ conduct, as it was understood to have been by the Claimant and her advisers in January and April 2019, had a bearing on the assessment of risk.

144. The Defendants’ litigation conduct aside, these are Mr Mason’s key submissions.

145. Mr Mason refers to Taylor Hampton’s detailed, 11-point risk assessment, prepared following a review of four lever arch files of evidence, the outcome of which was that the prospects of success were assessed as 50/50 “at best”. The risks significantly increased, he submits, with each of the five stages of the success fee, which provided the Defendants with ample and repeated opportunities (which they never took) to consider their position.

146. Leading and Junior Counsel, two months later, adopted the same staged risk assessment, relying upon several additional risk factors that they had assessed as at the time they entered into their own CFAs.

147. The success fee increased to 75% following service of a defence, rightly anticipating the increased risk attendant on the defence that followed, pleaded by leading and junior counsel, justifying the Defendant’s position at some length and offering a clear indication (as did their subsequent refusal of the October 2020 Part 36 offer) that the Defendants believed that they had a realistic chance of their defence succeeding at trial.

148. The increase to 85% following disclosure was justified by reference to the concerns about the likelihood that the Defendants would delay and that they would not preserve or disclose relevant evidence. The risks of delay were that witnesses could become untraceable or their memory of certain aspects relevant to the claim may become more distant; documentary evidence might not survive to trial; the Claimant could be become completely disheartened by the delay and give up; and the financial circumstances of the Defendants might change, as indeed occurred with the bankruptcy petition being served on the First Defendant.

149. The pleaded value of the claim did not guarantee anything. Realising any such value is always contingent upon success.

150. It was reasonable to be concerned about the fact that the Claimant could not demonstrate conclusively that the Defendants had unauthorised access to her WhatsApp account. This must be considered in conjunction with the risks associated with the potential destruction and/or fabrication of evidence by the Defendants.

151. Mr Mason refers to the observations of Mann J at paragraph 7 of his judgment in Gulati v MGN [2013] EWHC 3392 (Ch) on the availability of evidence in a “hacking” claim: “It is a familiar state of affairs that a claimant is ultimately reliant on disclosure from the other side in order to bring his case home, particularly in cases where the nature of the wrong is such that the defendant’s activities were covert so that, if the case is good, the defendant is likely to have a substantial amount of material in its hands with no equivalent in the hands of the claimant.”

152. The risk assessments in February and April 2019 took account of the risks attendant on the evidential disparity between the parties in the MPI claim and the risk that the destruction or withholding of evidence by the Defendants and the unavailability of evidence from third parties such as WhatsApp or the police was genuinely capable of defeating the Claimant’s claim.

153. In the event that the Judge at trial found the Claimant’s private information had been unlawfully intercepted, but that the hacking of the WhatsApp messages by the Defendants was justified on the basis of the termination of the Claimant’s contract of employment, the result would be that the Claimant would be awarded nominal or no damages. The definition of ‘win’ would not be met in these circumstances. The result is that no costs would have been payable at all. The Defendants’ consistent position throughout the MPI claim, right up to the opening of real negotiations in June 2024, was that the claim was worth only a nominal sum in damages.

154. The Defendants did rely upon the Claimant’s lack of credibility, referring at paragraphs 5 and 14 of the Defence to the findings of the ET.

155. This, says Mr Mason, is a paradigm case where a success fee of 100% is entirely reasonable. Conclusions: my Approach to the Risk Assessments

156. Typically, risk assessments represent (or should represent) a legal representative’s best attempt to address a range of known and unknown risks. As Atack v Lee demonstrated, an assessing judge is however never bound to assess a success fee only by reference to the factors specifically mentioned in a risk assessment. CPR 44.4(1) requires that the court have regard to all the circumstances. That may include real risks that are not mentioned in the risk assessment at all.

157. Risk Assessments often incorporate formulaic wording, and minor drafting errors and infelicities which emerge under the sort of detailed forensic scrutiny to which they have been subjected in this case.

158. So, for example, paragraph 2 of Mr Hirst’s risk assessment includes, among the reasons for setting the success fee, that “counsel will not be paid until the end of the case”, against which the relevant percentage is said to be 0% (rendering these provisions quite meaningless). It also prefaces Mr Hirst’s careful summary of additional points with the words “no additional points”. Within those additional points, Mr Hirst refers to “The absence of definitive evidence of misuse of private information by named opponents”, which I think must be intended to refer to unlawful access rather than misuse.

159. These are minor points and I intend no criticism. I mean only that I do not know whether the words “no material developments have occurred” represent Mr Hirst’s genuine view, in April 2019, that there had been no significant developments since 30 January, or whether (bearing in mind the contrast with the agreement signed by Ms Page the following day) the inclusion of the word “not” might have been another drafting error.

160. For present purposes I do not think that anything really turns on this, because my assessment of the risks in early 2019 is, necessarily, independent of those of Mr Hirst, Taylor Hampton or Ms Page. Conclusions: General Litigation Risk as at January and April 2019

161. Mr Mason argues that it is not open to the Defendants (as they did) to take the position consistently over five years that they had a complete defence to a claim that would yield at best nominal damages, to resist the claim (as they did) in the most robust terms one can reasonably imagine and yet for the purposes of assessing a success fee, to assert (as they do) that the Claimant always had prospects of success of between 80 and 90%.

162. In fact, it is. The contrast between the Defendants’ case on the merits of the MPI claim for the purposes of paying damages, and the Defendants’ case for the purposes of paying a success fee, is striking, but that in itself has no bearing upon an objective assessment of risk in the MPI claim as at January and April 2019.

163. If the Defendants were willing to go to some lengths (extending to multiple applications and attempted appeals) to resist a claim which they now say was, from the outset, meritorious and likely to yield a substantial sum in damages, that may have implications for any future findings I am required to make on, for example, proportionality. Those however are matters for another day.

164. I agree with Mr Mallalieu that at the heart of the Claimant’s case, in January and April 2019, was a claim for misuse of private information which did not rely upon establishing that the Defendants had obtained that information by unlawful means.

165. I also agree that, given the nature of the information obtained by the Defendants, its sheer volume, the period it covered and the fact that only a small part of it had any direct bearing upon the issues in in the ET proceedings, the burden upon the Defendants to establish that the use of the information was proportionate and justified was always going to be a difficult one to shift.

166. Setting aside that part of the claim that related to unlawful access to the Claimant’s WhatsApp account by the Defendants then the litigation risks, as best they could be judged in January and April 2019, would seem to have been these.

167. That the claim might fail for reasons yet unknown can be described as general litigation risk. Typically, in a case as carefully assessed as this one, that would not be a substantial risk. The Defendants’ conduct, as it was understood to have been by the Claimant and her advisers in January and April 2019, would however have added to it.

168. At the time that each CFA was entered into, the Claimant’s case was that the Defendants had used unlawful means to obtain information private to the Claimant and of the most personal and sensitive kind; that they had invented fictitious sources of that information to disguise what they had done; that they had used that information as they saw fit, without regard to the Claimant’s Article 8 rights, and without any attempt to ensure that their use of the information was proportionate, so that the injury to the Claimant caused by their actions would be limited to what was justifiable; and that they had used the information entirely without regard not only to those matters, but to such matters as legal privilege.

169. I am well aware that none of these allegations came to trial. They were never established, and it is not for me to make findings on them. That however was her case, and it was not a fanciful one. On the contrary, it was a conclusion reached and held throughout the case by the Claimant and her team of professional advisers. On the evidence, they had reasonable grounds not only to reach that conclusion but to incorporate it (as they subsequently did) in her pleaded case.

170. Under the circumstances Taylor Hampton and counsel, at the time of entering into their CFAs, would have been entitled to anticipate not only that the MPI claim would be robustly defended, but that the Defendants would make every effort, by fair means or otherwise, to impede it. This would necessarily have added an element of general risk that would be absent from cases in which an opponent could be expected to conduct themselves appropriately and in accordance with the law. Their reasonable concern about the extent to which the Defendants would comply with their duties to preserve and disclose relevant evidence was an example of this problem.

171. Further, the Claimant’s advisers could, in early 2019, properly have anticipated a long fight in circumstances where the Claimant had already been subjected to significant distress and where attacks on her character were likely to be a constant theme. There had to be some risk that the Claimant would be unable to see it through.

172. Delay was not otherwise a real risk factor. If, as Mr Mason suggested, it was anticipated that (the Defendants’ anticipated conduct aside) delay might affect the recollection of witnesses or bring about the loss of relevant documentation, Taylor Hampton could have taken steps to prevent that.

173. As for the proposition that delay might undermine the Defendants’ ability to pay, that is of questionable relevance where the right to payment under the Taylor Hampton, Hirst and Page CFAs was not limited by reference to the recovery of costs from the Defendants. In any event, the bankruptcy proceedings against the first Defendant appear to date from 2024. I am unaware of any reason to suppose, in early 2019, that the Defendants’ financial position might deteriorate over time.

174. I accept that there must have been some risk that a judge might take such a jaundiced view of the MPI claim that any award of damages would (albeit exceptionally) be made in a purely nominal sum. The findings of the ET as to the Claimant’s mendacity and malice had not been made at the time of the Taylor Hampton CFA, but they were clearly anticipated at paragraphs (viii) and (ix) of their Risk Assessment. They were known at the time of the Hirst and Page CFAs, in which both risk assessments referred to them.

175. Mr Hirst rightly identified the fact that the Claimant’s MPI claim did not rest upon her credibility, but her credibility does seem to have had some bearing on the risk of obtaining only nominal damages. The Defendants’ case in that respect was articulated in correspondence close to the date of trial, which I would summarise in this way: • The Claimant sought damages on the basis that she ought to have been able to keep private WhatsApp messages which she had accepted could properly be placed before the ET by the Defendants, and which disproved some of what she had said. • The Claimant was herself subject to a duty to disclose the relevant messages in the ET claim. Her failure to do so undermined her claim for damages, at least beyond a nominal figure, because privacy was lost in messages which she was herself duty bound to disclose. • Much of the detail in the WhatsApp messages was already known to the first Defendant because the Claimant had voluntarily and routinely shared that information with him in the course of her employment. Such distress as she had experienced arose primarily from the disclosure before the ET of information which she herself had been duty-bound to disclose. Nor was there any evidence that the Defendants had made any use of the information other than for the purposes of the ET proceedings.

176. It seems to me that the Defendants, in arguing that the Claimant was in breach of her own disclosure obligations in the ET proceedings, were identifying a real distinction between this case and Imerman , in which the husband was not in any way in default of his disclosure obligations and (in effect) the wife had attempted to pre-empt the disclosure process by illicit means. Here, the Defendants could at least say that they had made use of information which should have been disclosed to them voluntarily.

177. I expect that the answer to that would have been that it was still incumbent upon the Defendants (even if the Claimant’s confidential information had been obtained wholly legitimately) to hand it over unread and to rely upon the professional obligations of the Claimant’s advisers to ensure that full disclosure of anything relevant within that volume information was given. This point, however, was never determined.

178. There must also have been some prospect, in January and April 2019, of the Defendants limiting the amount of damages recoverable by the Defendant if they were able to show that her relationship with the first Defendant was such that much of what was on her WhatsApp account had already been shared voluntarily.

179. One only has to refer to Master Davison’s judgment of January 2023 to see the holes in the rest of the Defendants’ arguments. As Mr Mallalieu points out, Master Davison’s observations on the strength of the MPI claim are based on facts known to all the parties in January 2019.

180. Again, however, one must avoid the error of hindsight. Master Davison’s analysis was the sort of judicial analysis that the Claimant’s legal representatives, in January and April 2019, were hoping to obtain for the Claimant. It was not one that they had yet obtained.

181. The Claimant’s advisers were, accordingly, entitled to take into account at least some risk that the Claimant might lose the claim or receive only nominal damages. I do not know how the “minimal damages” figure of £3,000 was arrived at, but the point would seem to have been a purely nominal award was likely to have been smaller.

182. I do not mean that this was itself a substantial risk. If the Defendants (as would have appeared likely in January and April 2019) proved to be unable to show that their use of the Claimant’s private information was proportionate and justified, because their misuse of a huge body of private, sensitive information went beyond anything that could be justified by the ET claim, any judge could be expected to make an award of damages commensurate with such misuse, without further reference to the ET claim. Conclusions: The Part 36 Risk as at January and April 2019

183. I am unable to accept Mr Mallalieu’s submission to the effect that the Part 36 risk accepted by Taylor Hampton and counsel was negligible.

184. It cannot be right to assume that if the Claimant followed advice to reject a Part 36 offer and then failed to beat it, that the advice must have been misjudged.

185. Obviously, one bears in mind that a claimant instructing (as in this case) specialists in a given field of litigation is unlikely to be advised to reject an offer on unsound grounds. The reality of litigation is, nonetheless, that a thoroughly expert adviser can offer perfectly sound advice to the effect that a Part 36 offer should be rejected, whilst recognising (and making it perfectly clear) that there is still a risk that it may not be beaten.

186. Whilst the Part 36 waiver of fees in Taylor Hampton’s and Counsels’ CFAs only applied should the case go all the way to trial, in C v W a Part 36 provision in much the same terms (see paragraph 7 of the judgment of Moore-Bick LJ) was the primary consideration in allowing, on the facts of that case, a success fee of 20%.

187. Mr Mallalieu rightly says that one cannot simply impose upon this case in any the 20% success fee allowed in C v W . Each case turns on its own facts. Nor does one consider the Part 36 risk in isolation. In accordance with the guidance given in C v W , it must be factored into the assessment of the overall chances of success.

188. On the facts of this case, given that the Claimant had a strong MPI claim regardless of the means by which the Defendants had obtained her confidential information, and that the award of a reasonably substantial sum in damages was a much more likely outcome than a purely nominal award, an obvious step for the Defendants to take would have been to make a carefully judged Part 36 offer at an early stage, leaving them free to contest it as vigorously as they wished at a significantly reduced costs risk.

189. As for the proposition that Taylor Hampton (and, by necessary inference, counsel) would have been aware that the Defendants would be very reluctant to make any substantial offer to the Claimant, I have no real evidence as to either, and they would have been foolish to make any such assumption when assessing risk.

190. In short, it seems to me that the Part 36 risk was no less significant in this case than in C v W. Conclusions: The Risk Assessments of January and April 2019

191. I accept Mr Mallalieu’s submission that the risk assessments (Taylor Hampton’s in particular and Mr Hirst’s less so) tended to conflate the risk of failing to establish that the Defendants had unlawfully accessed the Claimant’s WhatsApp account, with the quite distinct and separate risk of the claim failing in its entirety.

192. That is not to say that establishing the “hacking” part of the case had no bearing on the overall prospects of success. It would have been apparent in January and April 2019 that should the Claimant be able to show that the Defendant had used unlawful means to obtain personal information from her WhatsApp account, then the danger of a nominal damages award would recede and the likelihood of an award of aggravated damages would be significantly enhanced. Again the Claimant’s credibility would have been relevant, because her case to the effect that the Defendants must have used illegitimate means to obtain access to her WhatsApp account relied to an extent upon her evidence as to how she used that account, and who had access to it.

193. I can well understand that the most conscientious legal adviser, contemplating years of litigation with no certainty of payment, might be inclined to take a conservative approach when it comes to assessing the risk that justifies their success fee. It is however incumbent upon an assessing judge to assess the risks objectively, and on an objective basis I have to say that Taylor Hampton’s stated conclusion, in January 2019, that the MPI claim had “at best” a prospective success of 50% was insupportable, as was their description of the claim as “wholly speculative”.

194. As Mr Mallalieu says, of the three risk assessments, Mr Hirst’s offers by far the most pertinent assessment of the relevant risk factors, and it is difficult to reconcile his clear-headed assessment of those factors with his ultimate conclusion that the MPI claim had a prospect of success only of between 50 and 55%.

195. I also accept that Taylor Hampton’s statement to the effect that, even in straightforward cases, “the maximum prospect of success is 80% at best” is an oversimplification. It does not, for example, address the risks in cases like C v W or Fortune v Roe , where liability has already been admitted, or the very straightforward cases contemplated in Callery v Gray .

196. Nonetheless, where liability for a given claim has not been admitted, where there is no reason to suppose that it will be and where the case cannot be said to be absolutely straightforward most solicitors, conscious of the uncertainties attendant upon all litigation, would I believe be very careful about assessing the prospects of success even of an apparently strong claim at in excess of 80%. Conclusions: Staging and the Recoverable Success Fee

197. The next question is how the success fees in the Taylor Hampton, Hirst and Page CFAs should have been staged.

198. Mr Mallalieu has offered some trenchant criticism of their staging.

199. I agree with him that in a case of this nature, one might expect to see a success fee that starts low and becomes higher, so as realistically to reflect increasing risk as the claim proceeds. What we have is a success fee that starts high and very quickly becomes higher, which does not assist the Claimant in attempting to justify a final stage of 100%.

200. Arguably, a success fee of 35% (representing, by reference to the Ready Reckoner, a prospect of success of 74%) would have been within a reasonable range for a single stage success fee. As the first, pre-issue stage of a staged success fee, in my view it is not. Nor am I able to see how the issue of a claim would in itself reflect an increased level of risk.

201. I can accept that the service of a defence, in which the Defendants could be expected to append a Statement of Truth to the proposition that they had a defence to the claim, would represent an increased level of risk.

202. I cannot say the same for disclosure, which is a standard stage in litigation under CPR Part 7 and does not seem to me to have any bearing on risk. The danger referred to by Mr Mason, that the Defendants might not preserve or disclose relevant evidence, had been a risk factor from the outset. Conclusions: the Success Fees Recoverable by the Claimant

203. The authorities to which I have been referred by Mr Mason and Mr Mallalieu show that a staged success fee starting at a low level may make it easier to justify a higher fee at a later stage, but also that staging cannot in itself justify a success fee that does not reflect a realistic assessment of risk. That is so even if a case gets to the point of trial on liability.

204. It follows that the Claimant is entitled to recover success fees that reflect the level of risk (as reasonably anticipated in early 2019) attendant on the MPI claim settling, as it did, at the point of trial. The fact that the success fees for earlier stages of the litigation were set at too high a level does not change that. If the MPI claim had settled at an earlier stage, then the Claimant would, equally, have been entitled to success fees reflecting the real risk as at that earlier stage.

205. Bright v Motor Insurers’ Bureau is a striking example of the principle that a success fee must reflect the real level of risk. In that case a motorist, reversing at speed, collided with a stationary pedestrian. He was charged with dangerous driving and absconded, leaving a civil claim against the MIB, which settled the claim five days before a trial on liability.

206. The Costs Judge’s conclusion that the prospect of a successful defence was always so low that a success fee of 30% was appropriate, was upheld on Appeal.

207. The Defendants were always in difficulty in the MPI claim, but their prospects of defending it were never as patently and transparently weak as were those of the MIB in Bright.

208. There were in my view two stages in the MPI claim at which a success fee increase would properly have reflected increased risk.

209. The first, as I have indicated, was the service of a defence. Mr Mallalieu suggests that a defence might have incorporated a full admission of liability, but that does not seem to me ever to have been a realistic expectation on the facts of this case. A defence could reasonably have been expected to incorporate (as, in due course, it did) a statement of truth in support of the proposition that the Defendants had a complete defence. Whether that could justify a success fee increase to 75% is another matter. On the facts of this case, I would say that it could not.

210. The second was the eventuality that the Defendants would take that defence to, or close to, a trial, demonstrating an apparent conviction that they could persuade a judge that they were right and the Claimant’s advisers wrong. Of course that was a real risk. Every legal adviser, however expert, is aware of the danger that a client’s case, not least in the face of determined opposition, may not succeed as expected.

211. Bearing in mind the risk factors I have identified, it seems to me that a reasonable final stage success fee, as set in January and April 2019 to reflect the eventuality that this case were to come to the point of trial, would have been 50%. By the Ready Reckoner that would equate to continuing prospects of success in the region of 67% (or as Stewart J put it, about two thirds).That seems to me to reflect the underlying strength of the MPI claim, offset by the increased risk attendant on the service of a defence, followed by an imminent contested trial.

212. I would add that the same success fee, on the same logic, would have been justified in the event of the case being determined on preliminary issues (which does not seem to me to be the same as a strike-out application). As the question in hand is however a reasonable success fee to reflect the way in which the case was in fact resolved, that would seem to be academic.

213. For the reasons I have given, my finding is that a success fee of 50% is recoverable on the fees of Taylor Hampton, Mr Hirst and Ms Page KC.