Cafe owner gets £30,000 legal bill for £2,000 claim

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I read with interest, as I am sure most of my colleagues did, about the cafe owner who was sued by a gas engineer after he slipped on a wet floor in her premises and injured himself. Unsurprisingly he brought a claim for personal injury.

After all, the accident wasn't his fault, he was injured and was unable to work for a period of time as a result.  I don't think anyone would criticise him for pursuing a claim.

The media uproar about this case relates to the cafe owner being ordered to pay costs of £30,000.00 and she is now facing losing her business and home.

Now, whilst  I am of course sympathetic  to her position, my first question is why wasn't she insured? If she had had a policy of public liability insurance in place, her insurance company would have dealt with the claim; probably on a swift economic basis, and she would only have been responsible for the policy excess and an increase in her premiums.  It appears that she wasn't insured and chose to instruct solicitors to defend the claim.

As an aside you may be interested to know it is not compulsory in England for a business to have Public Liability Insurance. If she employed people, then it is compulsory to have Employers' Liability Insurance.  Therefore, two people could be injured at the same time and one is covered by insurance whereas the poor unsuspecting member of the public isn't.

The case appears to have been initially defended only then to settle out of court in the sum of £2,000.00.  If you choose to defend a claim, you have to be prepared to face the financial consequences of losing, especially if you are paying the potential damages and costs  yourself. I assume that her solicitors advised her that she had reasonable prospects of defending the claim.

However, why the claim settled without being heard at  trial is something to ponder on. I certainly hope that her solicitors considered her financial position and discussed settling the claim on an economic basis, i.e. without an admission of liability  but still paying compensation and costs.

So, now the question of costs. The injured person upon settling his claim and receiving an award of damages over £1,000.00 is entitled to have his costs paid. The  case was funded on a Conditional Fee Agreement with a success fee.  The  injured person is obliged to tell this to the Defendant and most solicitors do it when the original letter of claim is sent.  Therefore, she knew from the very beginning how the case was funded and that a success fee was payable.  The costs claimed are unlikely to have been unreasonable, and presumably weren't as they were assessed by the Court. The costs of bringing a claim that is defended can be extensive.

The injured person has to fully investigate liability in order to prove their case. Most only do this after the Defendant has disputed the claim and basically told them to "prove it".  They have to consider all documentation disclosed by the Defendant as evidence of why they are disputing the claim.

The injured person has to prove their injury which involved obtaining and reviewing medical notes and records, instruct a medical expert, obtain counsel's advice on the prospects of success , because an insurer will not allow the injured person to issue proceedings without having this, draft witness statements, draft a schedule of loss and draft and commence Court proceedings.

Disbursements in such a claim would include GP/hospital fees (£50 each), medical report fees (usually £500 each, depending upon specialism), court fees and  barristers fees. The claim would have been insured either by a BTE or ATE policy and the policy premium, likely to be in excess of £1,000.00 would have been included in the costs claimed.

It is therefore quite easy to see how costs can easily mount up. These don't all go to the injured person's lawyer as probably a good quarter or half relate to disbursements and barristers fees.

Whilst a legal bill of £30,000 does seem excessive for a case worth £2,000, stories like these don't tell the whole story and can on occasion be misleading.

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