Swann v Slater & Gordon: The 25% Cap After Richardson and Perrett
Solicitors Act 1974 — 2026-08-10
Where Swann v Slater & Gordon stands after Richardson [2025] EWHC 1220 (SCCO) and Perrett v Wolferstans [2026] EWHC 50 (SCCO): the 25% cap secures informed consent, but success fees and blended rates remain vulnerable.
Overview
Cases covered:
- Swann v Slater & Gordon LLP (unreported, 25 January 2021, Birmingham District Registry, District Judge Rouine)
- Richardson and 223 Others v Slater & Gordon UK Limited [2025] EWHC 1220 (SCCO), Senior Costs Judge Rowley, 19 May 2025
- Ryan Perrett v Wolferstans LLP [2026] EWHC 50 (SCCO), Senior Costs Judge Rowley, 14 January 2026
Key Issues:
- Whether a 25% cap on deductions from damages gives the client enough information to consent to a shortfall charge
- Whether CFAs with a damages cap are unenforceable Damages Based Agreements
- How much oral explanation a solicitor must give when signing up a client
- Success fees and blended hourly rates on solicitor and client assessment
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In January 2021, District Judge Rouine, a regional costs judge sitting in the Birmingham District Registry, decided Swann v Slater & Gordon LLP. It was the lead case in more than 400 solicitor and own client assessments brought against the firm by former personal injury clients seeking to recover deductions from their damages. The judgment is unreported, but it has never gone away. Five years on, costs judges are still being asked whether it was rightly decided, whether it survives later authority, and whether the 25% cap at its centre really does the work solicitors claim for it.
Two recent decisions of Senior Costs Judge Rowley answer those questions. Richardson v Slater & Gordon [2025] EWHC 1220 (SCCO) dealt with a fresh wave of 224 claims against the same defendant. Perrett v Wolferstans [2026] EWHC 50 (SCCO) considered Swann directly and rejected the submission that it had been superseded. Anyone searching for Swann today needs all three.
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What Swann Decided
Swann held that a reference in the retainer to a maximum liability of 25% of the client's damages was, in the words of paragraph 48 of that judgment as recorded by Senior Costs Judge Rowley in Perrett, "more than sufficient information for the purpose of obtaining informed consent to making a claim for sums to be deducted from their award of damages." The judge also held that no fiduciary duty arises while a solicitor negotiates a retainer with a prospective client, a point the Court of Appeal later confirmed in Belsner v Cam Legal Services [2022] EWCA Civ 1387 at [74].
The challenge to more than 400 conditional fee agreements failed. The decision is not binding on any court, but as the discussion below shows, its reasoning has worn well.
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Richardson v Slater & Gordon: The 224-Client Challenge
Richardson was the sequel. JG Solicitors, instructing Roger Mallalieu KC, brought Solicitors Act assessments for 224 former clients. Robert Marven KC appeared for the firm. Ten test claimants were selected, and Senior Costs Judge Rowley heard nine preliminary issues over a week in October 2024, with judgment on 19 May 2025.
The CFAs were not disguised DBAs
The claimants' boldest argument was that a CFA with an effective 25% cap on recovery by reference to damages was really a Damages Based Agreement, and unenforceable for non-compliance with the DBA Regulations 2013. The judge dismissed it. An agreement which complies with the regulations it was designed to meet cannot be rendered unenforceable by separate regulations aimed at a different form of agreement, and there was no evidence that the retainers were engineered to take 25% of damages come what may (at [82] to [83]). Mr Marven warned of "horrific consequences" if the argument succeeded, since every CFA would become an unenforceable DBA and vice versa. The judge agreed, describing the claimants' attempt to confine the point to low value claims as a line "of the Maginot variety" (at [84]).
How much explanation does a client need?
The heart of the judgment is the question of how much detail the solicitor had to give at the point of signing up. The claimants said the firm should have explained the workings of the CFA in depth: how the success fee was calculated, that recoverable costs were fixed, and what shortfall would follow. The firm said it needed to explain the key points orally and could leave the rest to the written pack.
The judge preferred the firm's approach. The only complete call transcript, for test claimant Ms Gwilliams, showed the adviser following the firm's explainer script almost word for word, and the client signing electronically five minutes after the pack arrived by email. The judge held at [69]:
> "the combination of an oral explanation of the key terms in a simple fashion together with provision of a comprehensive written agreement was a perfectly appropriate method for informing the client of the component parts and signing them up in a businesslike manner."
He identified the key term at [70]: not the success fee percentage, but the cap. The key term in respect of a successful claim is the one which explains "the worst potential outcome to the client", the 25% deduction prescribed by the CFA Regulations 2013. That is Swann's logic restated in the SCCO.
It mattered that the witnesses had not read the documents they received. Four test claimants gave oral evidence, and each said there was something they had not been told about. Each was then taken to documents which said exactly that thing. The judge, applying Leggatt J's well known observations on memory in Gestmin v Credit Suisse, found their recollections had evolved rather than that they were untruthful, and concluded the onboarding calls followed the script (at [32]).
Section 74(3) and informed consent
For the test claimants who had issued proceedings, section 74(3) of the Solicitors Act 1974 limited recovery to the between the parties figure unless a written agreement under CPR 46.9(2) said otherwise. The judge held that the retainer documents, which plainly contemplated costs beyond what the opponent would pay, satisfied CPR 46.9(2). More significantly, he held that CPR 46.9(2) requires agreement, not informed consent. Belsner decides there is no fiduciary duty when the retainer is negotiated, and excluding section 74(3) is part of that negotiation (at [129] to [133]). Informed consent belongs to the CPR 46.9(3) presumptions, which bite on approval of costs during the retainer, not on the bargain that created it.
Where the firm lost
Slater & Gordon did not leave unscathed, and this is the part the headlines missed. The presumption that the client approved the success fee was rebuttable, and rebutted. The firm's risk assessment was generic, and 10% of every success fee was attributed to postponement of payment, an unusual arrangement that was never explained to the clients (at [156] to [159]). The judge assessed the success fees himself: 10% for passenger claims and 15% for straightforward driver claims, tracking Callery v Gray and Halloran v Delaney. The 35% fee on the two accident at work claims that settled was held reasonable on their individual risks, and the contractual 100% survived for the one case that reached a hearing (at [164] to [169]).
The hourly rate fell too. The firm charged £217 per hour for every fee earner regardless of seniority, a figure taken from the Grade A rate in the 2010 guideline rates. The judge found a single blended rate for all fee earners unusual in itself, and without explanation it had "the appearance of being simply an attempt to charge lower grade fee earners at a higher rate" (at [179]). He allowed the guideline rates, National Band 1, observing at [181] that "For once however, it seems to me that the GHR are exactly the sort of rates that ought to be allowed, whether or not costs are being sought from the opponent or from the client."
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Perrett v Wolferstans: Swann Survives
Perrett, handed down in January 2026, was a non-contentious assessment of a modest bill: profit costs of £4,800 reduced on item by item assessment to about £3,864, with a success fee of £1,775.85 allowed as claimed. Its significance lies in what Senior Costs Judge Rowley said about the authorities.
The claimant argued that the fixed recoverable costs of £900 represented fair remuneration, so anything above them needed full explanation, and that Swann had been superseded by Constable J's decision in St James v Wilkin Chapman [2024] EWHC 1716 (KB). The judge re-read St James and rejected the submission at [16]:
> "None of this, as far as I can see, supersedes the decision in Swann, albeit that DJ Rouine's decision is not binding upon me in any event."
He also rejected the idea that inter partes fixed costs set the benchmark for what a solicitor may charge their own client, citing Lavender J in SGI Legal v Karatysz and holding that neither Belsner nor St James had displaced that passage. And at [25] he put the cap where Swann put it:
> "Insofar as the need to keep the client informed is concerned, it seems to me that confirmation of the maximum liability is the crucial element to this."
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Practical Implications
For Costs Lawyers
1. The 25% cap remains the crucial disclosure. Three decisions now converge on the same point: what the client must understand is the worst outcome, the maximum deduction from damages. Challenges built on the absence of a detailed CFA tutorial at sign-up are unlikely to succeed.
2. Attack the success fee and the rates, not the retainer. Richardson shows where these assessments are actually won. Generic risk assessments, unexplained postponement elements and blended rates are all vulnerable, and the reductions were substantial: road traffic success fees cut from 25% to 10% or 15%, and a flat £217 per hour cut to guideline rates.
3. CPR 46.9(2) needs agreement, not informed consent. Where proceedings were issued, a written agreement contemplating recovery above the inter partes figure disapplies section 74(3). Arguments importing an informed consent requirement into 46.9(2) failed in Richardson.
4. A signing transcript is powerful evidence. The one recorded onboarding call in Richardson did more for the defendant than its witness evidence. Firms that record and retain these calls will be hard to attack years later; claimants relying on recollection face Gestmin.
For Litigation Practitioners
1. Keep the sign-up explanation short and accurate. Richardson approves a businesslike model: explain the key points orally in under ten minutes, then send a comprehensive pack. Over-explanation risks confusing the client and adds nothing to enforceability.
2. Explain anything unusual, in terms. The postponement element of the success fee and the single blended rate both failed because nobody told the client. If a charging feature is out of the ordinary, it needs its own sentence in the retainer discussion, or the CPR 46.9(3) presumption will run against the firm.
3. Do not treat the cap as a licence. The cap secures consent to a deduction; it does not make the underlying charges reasonable. Success fees and rates must still be justifiable case by case on assessment.
4. Watch the risk assessment. A grid of standard percentages dressed as a risk assessment did not survive scrutiny. Set success fees by reference to the risks of the individual claim and record why.
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Conclusion
Swann was an unreported first instance decision that could have sunk into obscurity. Instead it has become the reference point for a question that recurs in every deductions claim: how much does a client need to be told before agreeing that their solicitor may take up to a quarter of their damages? Richardson answers it at length and Perrett answers it in terms, and both come out where DJ Rouine did in 2021. The cap itself, clearly stated, is the crucial information.
The commercial lesson cuts both ways. Firms have held the line on enforceability, informed consent and consumer law, but Richardson still cost the defendant most of its road traffic success fees and a large slice of its rates across 224 claims. Deductions claims remain worth bringing. The winning ground has simply moved from retainer validity to success fees, rates and the line by line assessment.
Whether Swann itself is ever reported, its reasoning now runs through two SCCO judgments of the Senior Costs Judge. Until the Court of Appeal says otherwise, the 25% cap, properly drawn to the client's attention, is where informed consent begins and, for most practical purposes, where it ends.
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Citations:
Swann v Slater & Gordon LLP (unreported, 25 January 2021, Birmingham District Registry)
Richardson and 223 Others v Slater & Gordon UK Limited [2025] EWHC 1220 (SCCO)
Ryan Perrett v Wolferstans LLP [2026] EWHC 50 (SCCO)
Full judgments available at: Richardson v Slater & Gordon (National Archives) | Perrett v Wolferstans (National Archives)
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