Evans v Fletchers Solicitors: Success Fee Disallowed for Failure to Investigate BTE Insurance [2026] EWHC 1523 (SCCO)
success fee — 2026-06-19
On a section 70 Solicitors Act assessment the SCCO disallowed a success fee of £30,365.13 in full, because the solicitor failed to make reasonable enquiries into the client's pre-existing BTE legal expenses insurance before signing him to a CFA.
Overview
Date: 19 June 2026
Judge: Senior Costs Judge Rowley
Court: High Court of Justice, Senior Courts Costs Office
Citation: [2026] EWHC 1523 (SCCO)
Case Number: SC-2023-BTP-000206
Nature of Proceedings: Solicitor and client assessment under section 70 of the Solicitors Act 1974
Representation: Mark Carlisle (of JG Solicitors) for the claimant; John Meehan (instructed by Fletchers Solicitors Limited) for the defendant
Key Issues:
- Whether a personal injury claim should have been funded by pre-existing legal expenses insurance rather than a Conditional Fee Agreement
- The adequacy of a solicitor's enquiries into Before the Event insurance
- Whether the burden of proof on funding and causation rests with the client or the solicitor
- The correct measure of any reduction to the solicitor's bill
In Evans v Fletchers Solicitors Limited [2026] EWHC 1523 (SCCO), the Senior Courts Costs Office, on a solicitor and client assessment under section 70 of the Solicitors Act 1974, disallowed a success fee of £30,365.13 in full because the solicitor failed to make reasonable enquiries into the client's pre-existing Before the Event (BTE) legal expenses insurance before signing him to a Conditional Fee Agreement. Senior Costs Judge Rowley held that, on the balance of probabilities, suitable insurance was available, the client would have used it, and the success fee would never have been incurred. The decision is a significant restatement, in the post-2013 landscape, of the solicitor's duty to investigate alternative funding.
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The Facts
The claimant, Mr Peter Evans, instructed Fletchers Solicitors Limited to act in a personal injury claim arising from a road traffic accident in 2017 in which he was riding a motorcycle. The claim succeeded and settled for £250,000, recorded in an order dated 14 July 2021. The defendant rendered an invoice to the claimant of £61,615.13, inclusive of a success fee of £30,365.13 capped at 25% of the relevant damages, the so-called Jackson Cap.
The claimant sought an assessment of that bill under section 70 of the Solicitors Act 1974. While there were challenges to individual items and to the agreement of the inter partes costs, the central issue, and the subject of this judgment, was whether the case should have been funded by legal expenses insurance rather than a CFA. Had it been, the claimant argued, he would have paid neither a success fee nor an After the Event (ATE) insurance premium.
The funding history was central. The claimant signed a CFA on 24 April 2017. As part of the sign-up, his wife completed a funding options form confirming that the family held legal expenses cover taken out with its home insurance through Zurich Insurance Company. No enquiry into that cover was made in 2017. The court found, on the available evidence, that no enquiries were made of either Zurich or DAS, the legal expenses insurer, at that time.
The case was taken over by Ms Charlotte Mackulin in May 2019 given its value. She made enquiries of various entities on the insurance checklist, but the responses were inconclusive and, critically, she never reached DAS, the actual legal expenses insurer. A reply from Zurich enclosing a policy booklet and directing the firm to the legal expenses section on page 7 was treated as a refusal to confirm cover. ATE insurance with a limit of indemnity of £100,000 was then incepted. When the claimant's new solicitors, JG Solicitors, made enquiries in 2022, they established the position with little difficulty: the renewal pack confirmed Family Legal Expenses cover managed by DAS Legal Expenses Insurance Company Limited, and the policy expressly covered personal injury claims arising from a sudden accident.
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The Five-Stage Analysis
Senior Costs Judge Rowley structured the judgment around five questions. Each is addressed in turn.
1. Were the solicitor's enquiries unreasonable?
The court found that they were, in numerous respects. The starting point was the established line of authority on BTE enquiries. In Sarwar v Alam [2001] EWCA Civ 1401 the Court of Appeal held that, even in a modest claim, proper modern practice required a solicitor to invite the client to bring any relevant motor, household or stand-alone BTE policy to the first interview. In Garrett v Halton Borough Council [2006] EWCA Civ 1017 the court gave guidance that solicitors should generally make enquiries of potential BTE insurers even where the client was unclear whether cover existed.
Against that background, the defendant's conduct was deficient. The most obvious failing was the absence of any enquiry at all for more than two years after the accident. When enquiries were eventually made, the Zurich letter was, in the judge's view, completely miscategorised as a refusal to confirm cover, despite carrying a customer services telephone number in bold which no one called. The judge emphasised that specialist personal injury solicitors know, or ought to know, that the legal expenses insurer is a separate entity from the home insurer, a point made plain in Sarwar and reflected in the Insurance Companies (Legal Expenses Insurance) Regulations 1990, which require legal expenses claims to be managed by an undertaking with a separate legal personality.
The judge's conclusion was unsparing:
> making desultory enquiries of the Zurich, and without getting to the LEI company at all, cannot be said to be making any form of reasonable enquiry.
He went further, finding that the stock correspondence was drafted to produce a particular outcome:
> the correspondence, in my view, is drafted in a way which sought to encourage a lacklustre response from any potential LEI insurer so that the existing CFA arrangement was not disturbed by any putative BTE cover.
The contrast with JG Solicitors, who established the legal expenses insurer some years later with little difficulty, told against the defendant.
2. Was there legal expenses insurance for the claimant to use?
On the balance of probabilities, yes. The plain words of the Zurich home solutions policy provided that personal injury claims were covered by the legal expenses option. The defendant's principal evidence to the contrary came from Mr Gary Ratcliffe, its Head of Costs, who said that in his experience family legal expenses cover attached to home insurance did not extend to road traffic accidents. The judge gave that evidence only modest weight, observing that the firm's own stock enquiry letter, designed to produce a negative response, would itself have limited the occasions on which the firm was ever instructed under such cover, so narrowing Mr Ratcliffe's experience.
The position of DAS reinforced the conclusion. When pressed by solicitors on both sides, Mr Charles Hazel of DAS declined to state that motor accidents were excluded, maintaining only that coverage would depend on the individual policy wording. The judge drew the obvious inference:
> That can only mean, as far as I am concerned, that some family legal expenses insurance did cover motor accidents, or at least that Mr Hazel suspected that it might have done.
To obtain more disinterested evidence, the judge turned to the preliminary report of Lord Justice Jackson's Review of Civil Litigation Costs (May 2009), which described BTE add-ons to household policies as covering, depending on the terms, personal injury and clinical negligence claims, with insurers frequently paying claimant solicitors on a conventional hourly rate basis. The judge preferred the plain words of the policy, supported by Jackson LJ's description of the market, to Mr Ratcliffe's recollection.
3. Would using the insurance have meant no deduction?
The defendant argued that the claimant bore the burden of proving that the case would have been run without any deduction. The judge rejected the suggestion that the claimant had to prove a negative. The claimant's case was simply that the solicitor's inaction deprived him of insurance he had already purchased; using that insurance would have provided an indemnity behind a private retainer, requiring neither a success fee nor an ATE premium. If the defendant contended that it would nevertheless have charged a success fee, it was for the defendant to demonstrate that, and it led no such evidence.
The judge drew support from a footnote in Lord Justice Jackson's report, which described BTE retainers as operating "Without a CFA", confirming that there is no certainty of any deduction where such insurance is used.
A more substantial argument was that the legal expenses policy's £50,000 limit of indemnity was insufficient, since that limit is conceptually exhausted at roughly twice the rate of an ATE policy because it covers both sides' costs. The judge accepted that the cover would not have reached trial, but identified two answers. First, the ATE policy actually taken out, with a £100,000 limit, was itself insufficient to reach trial: a simple addition of the budgeted disbursements and costs demonstrated as much. Second, top-up ATE insurance has long been available, whether the original cover was BTE or ATE, and would have been required on either footing had the case reached trial. The lower limit of indemnity therefore did not militate against using the BTE cover. Most cases, the judge noted, settle well within such limits.
4. Would the claimant have used it if available?
The defendant relied on Perry v Raleys Solicitors [2019] UKSC 5, arguing that the claimant had to prove that, properly advised, he would have acted differently and achieved a better outcome, and that the loss of chance approach should reduce any award. The judge rejected the analogy. This was a section 70 assessment, not a professional negligence claim, and the loss of chance discount derived from Kitchen v RAF [1958] 1 WLR 563, used to reflect the vagaries of a counterfactual in negligence cases, simply did not apply.
The correct test was the balance of probabilities. The judge accepted the claimant's evidence that, had he known that using his Zurich-linked cover would have reduced the deductions from his damages, he would have taken that course. While such evidence inevitably appears self-serving, there was no reason to doubt it and no contrary evidence from the defendant. The judge added a broader observation: since the general end of recoverability in 2013, the use of BTE cover as a method requiring neither a success fee nor an ATE premium weighs heavily in the balance. A client who has paid for insurance can be expected to use it unless unable to do so. He was satisfied that the claimant would have used the policy, whether by requiring Fletchers to act under it or by instructing another firm willing to do so.
5. What are the consequences?
The claimant pressed two arguments for reducing the base costs as well as the success fee. First, that the court should follow McDaniel & Co v Clarke [2014] EWHC 3826 (QB), where the disallowance of all base costs was upheld because the client's trade union would have backed the claim. Second, that the claimant should receive credit for the £50,000 limit of indemnity by deducting it from the bill.
The judge rejected both. McDaniel was distinguishable: where a union backs a member, the member has in effect no direct responsibility for the costs, whereas a client using BTE insurance remains liable for the base costs, the insurance providing only an indemnity. There was therefore no basis to disallow the base costs in principle. Nor was there weight in the indemnity limit argument: the claimant had succeeded and would recover his reasonable costs from his opponent, and only unreasonable costs, equally irrecoverable under the policy, would fall outside that.
The success fee was a different matter. On the reasoning running through the judgment, it would not have been incurred had the BTE policy been used:
> based on the reasoning throughout this judgment, it is clearly my view that the success fee would not have been incurred if the BTE policy had been utilised. On that basis, I disallow the success fee in its entirety.
The judge noted that the same reasoning would apply to the ATE premium, but that item did not strictly fall for assessment within these proceedings. The base costs survived.
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Practical Implications
For Costs Lawyers
1. The BTE enquiry duty survives, and arguably hardens, post-2013. Far from diminishing after the end of recoverability, the duty carries greater weight. The judge treated BTE as the funding method that avoids both a success fee and an ATE premium, so a failure to investigate it weighs heavily on a section 70 assessment.
2. Reach the legal expenses insurer, not the home insurer. Enquiries that stop at the household insurer are not reasonable enquiries. The legal expenses undertaking is a separate legal personality under the 1990 Regulations, and the file must show that it was approached and pressed.
3. Stock enquiry letters will be scrutinised for their design. Correspondence drafted to draw a negative or lacklustre response from an insurer is a serious vulnerability. On a challenge, an under-documented file invites the inference that no genuine enquiry was made.
4. The client does not have to prove a negative. Where the challenge is that BTE cover was available, it is for the solicitor to show that a success fee would still have been charged. Build the assessment around the absence of solicitor evidence on that point.
5. No loss of chance discount on a section 70 assessment. Perry v Raleys and the Kitchen discount belong to professional negligence. On a solicitor and client assessment the test is the straightforward balance of probabilities, which is materially more favourable to the challenging client.
6. Frame the remedy correctly. The result here was disallowance of the success fee, not a McDaniel-style nil assessment of the whole bill. Base costs remain recoverable where the insurance would merely have provided an indemnity. Reserve the total-disallowance argument for genuine full-indemnity cases such as union backing.
For Litigation Practitioners
1. Document the BTE investigation at the outset. Record the enquiry, the insurer identity, the dates, and every response. The decisive factual finding here was that the file contained no record of any enquiry in 2017.
2. Do not delay. A gap of more than two years between accident and enquiry was the most obvious deficiency. The further from the incident, the harder it becomes to establish or use the cover, as DAS itself observed.
3. Treat ambiguous insurer replies as a prompt to pick up the telephone. A letter enclosing a policy booklet and pointing to the legal expenses section is not a refusal of cover. A single call to the number on the letter may resolve the question.
4. Reconsider the reflexive CFA. Signing a client to a CFA and intending to unwind it later is permissible, but only if the unwinding actually happens through proper enquiry. Where viable BTE cover exists, the success fee and ATE premium are exposed on any later challenge.
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Conclusion
Evans v Fletchers is a clear and practically important restatement of the solicitor's duty to investigate alternative funding, delivered by the Senior Costs Judge and rooted in the established authority of Sarwar and Garrett. Its significance lies in applying that duty firmly to the post-recoverability era: the attraction of BTE insurance has waxed and waned over twenty-five years, but since 2013 it has become the option that spares the client both a success fee and an ATE premium, and the courts will expect solicitors to investigate it with corresponding rigour.
The financial impact is direct. A success fee of £30,365.13 was disallowed in its entirety, close to half of a £61,615.13 invoice, and the judge signalled that the ATE premium would fall the same way on the same reasoning. For claimant firms that sign clients to CFAs without a properly documented BTE investigation, the decision marks out a clear route to a solicitor and client challenge and a refund. The judge's willingness to read a stock enquiry letter as engineered to suppress a positive insurer response should give particular pause to any firm relying on a template process.
This is a first-instance decision of the Senior Courts Costs Office, persuasive rather than binding, but its careful five-stage reasoning and the seniority of the judge will make it difficult to dislodge. Practitioners on both sides should expect it to feature prominently in BTE funding challenges, and receiving party firms should audit their first-interview funding procedures against it now.
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Citation: Peter Evans v Fletchers Solicitors Limited [2026] EWHC 1523 (SCCO)
Full judgment available at: National Archives
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