Factual and Procedural Background
The Deceased died on 6 August 2016 leaving his entire estate to his widow (the Appellant). Their daughter (the Respondent) and son received nothing under the will. Relying on the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”), the Respondent commenced proceedings seeking reasonable financial provision. She funded her claim through a conditional fee agreement (“CFA”) carrying a 72 % success fee.
At first instance, Judge Cohen concluded that the will failed to make reasonable provision for the Respondent and awarded a lump sum of £138,918, which included £16,750 towards the CFA success fee. He also ordered the Appellant to pay £80,000 of the Respondent’s base costs.
The Appellant appealed. The Court of Appeal (Judge King, Judge Singh and Judge Elias) upheld the inclusion of the success-fee element. The Appellant obtained permission to appeal to the Supreme Court. The present opinion determines that appeal.
Legal Issues Presented
- Does section 58A(6) of the Courts and Legal Services Act 1990 prohibit a court, when making an award under section 2 of the 1975 Act, from including any sum referable to a CFA success fee?
- Are liabilities for success fees capable of constituting the claimant’s “financial needs” for the purpose of section 3(1) of the 1975 Act?
Arguments of the Parties
Appellant's Arguments
- Section 58A(6) creates a blanket prohibition on shifting success fees between parties; any order—including a substantive award—that compels such payment is a “costs order” and therefore barred.
- Costs (including success fees) are governed exclusively by the Civil Procedure Rules (“CPR”) and cannot be recovered as part of substantive relief; allowing recovery would undermine the CPR costs regime and Part 36 settlement incentives.
- The concept of “maintenance” or “financial needs” under the 1975 Act does not extend to litigation costs unconnected with day-to-day living expenses.
Respondent's Arguments
- Section 58A(6) only bars inclusion of success fees in a discrete “costs order”; it does not inhibit their inclusion as part of substantive provision under the 1975 Act.
- The Respondent’s enforceable liability to pay the success fee is a financial need that the court must consider under section 3(1).
- Family-law analogies demonstrate that unmet liabilities for legal costs can properly be treated as needs (citing financial-remedy jurisprudence such as Azarmi-Movafagh v Bassiri-Dezfouli).
- Excluding success fees would leave impecunious claimants unable to litigate, frustrating the purpose of the 1975 Act.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|
| In re Dennis (1981) 2 All ER 140 |
“Maintenance” can include payment of debts in appropriate cases. |
Referred to illustrate the breadth—but limits—of “maintenance”. |
| Ilott v The Blue Cross (No 2) [2018] AC 545 |
Approval of the Dennis approach; maintenance covers everyday living expenses. |
Cited to show that litigation costs are not ordinary living expenses. |
| Azarmi-Movafagh v Bassiri-Dezfouli [2022] 1 FLR 157 |
Family-law awards may include unrecovered own-costs liabilities. |
Distinguished; family proceedings operate under a “no-order” costs principle unlike CPR. |
| Cockburn v Edwards (1881) 18 Ch D 449 |
Costs cannot be recovered as damages in the same action. |
Used to support the general separation between substantive relief and costs. |
| Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674 |
Successful party may not sue to recoup unrecovered costs. |
Emphasised the historic consistency of the costs/separate-relief divide. |
| Barnett v Eccles Corpn [1900] 2 QB 423 |
Only taxed costs are recoverable; excess cannot be claimed as compensation. |
Supports non-recoverability of solicitor-client shortfall through substantive award. |
| Seavision Investment SA v Evennett (The Tiburon) [1992] 2 Lloyd’s Rep 26 |
Foreseeable litigation costs still irrecoverable as damages between same parties. |
Reinforces that rationale continues despite foreseeability. |
| A v A (Maintenance Pending Suit: Payment of Legal Fees) [2001] 1 WLR 605 |
Family courts may treat legal-cost funding as maintenance. |
Distinguished because success fees are barred in family proceedings. |
| Currey v Currey [2007] 1 FLR 946 |
Further family-law authority on legal-cost funding as maintenance. |
Again distinguished for same reasons as A v A. |
| Jassal v Shah [2024] EWHC 2214 (Ch) |
Base costs cannot be folded into substantive 1975 Act awards. |
Cited approvingly as consistent with long-standing cost principles. |
Court's Reasoning and Analysis
1. Nature of Costs Versus Substantive Relief. The court reiterated the long-standing common-law rule that litigation costs are handled exclusively through the costs jurisdiction under section 51 of the Senior Courts Act 1981 and CPR Parts 44-48. Authorities from the nineteenth century to modern times (e.g., Cockburn v Edwards; Quartz Hill) confirm that costs cannot be embedded in substantive awards.
2. Operation of Section 58A(6). Parliament, accepting the Jackson Report recommendations, forbade recovery of success fees inter partes. Any order compelling such payment—whether labelled “costs” or “lump-sum award”—is, in substance, a costs order and is caught by the prohibition.
3. Policy Coherence. Allowing success fees inside substantive relief would defeat Parliament’s intent, re-introduce the very cost inflation and settlement distortion that section 58A(6) sought to end, and undermine CPR Part 36 incentives.
4. “Financial Needs” Under the 1975 Act. While liabilities can constitute needs, litigation liabilities incurred within the same proceedings are excluded because treating them as needs collapses the costs/substantive distinction and erodes the integrity of the CPR regime.
5. Distinguishing Family-Law Analogies. Financial-remedy cases operate under a “no-order” costs principle; because there is effectively no separate costs regime, including costs within substantive relief does not create inconsistency. The same is not true for 1975 Act claims, which remain subject to the CPR.
6. Interim Orders Under Section 5. The court accepted that interim payments to fund litigation may be granted to enable access to justice, but that discrete power does not justify folding success fees into the final award.
7. Consequence. The inclusion of £16,750 representing 25 % of the Respondent’s success fee was incompatible with section 58A(6) and the general costs principles, and must be removed.
Holding and Implications
HOLDING: The appeal is ALLOWED; the sum representing the Respondent’s CFA success fee is struck out of the award.
Implications: The decision confirms that success fees are never recoverable from an opposing party in civil litigation, whether by costs order or by embedding them in substantive relief. Practitioners bringing 1975 Act claims must therefore treat CFA uplifts as the claimant’s own liability. The judgment reinforces the coherence of the CPR costs regime and preserves the effectiveness of Part 36 settlement mechanisms without setting new precedent beyond reaffirming existing cost principles.