As has been widely reported over the last few days, Stephen Hunt of Griffins, faces a potential £1m personal bill on a case where recoveries (£125k) were significantly less than the legal costs (£1m) on a case. Mr Hunt lost his appeal against Chief Master Marsh’s decision but may still launch a separate appeal. However, this will entail further costs, of course.
This case highlights the benefits of transferring the full risk of a case to Manolete Partners. If costs exceed recoveries, then it is Manolete that bears the full loss. Manolete only takes a share of the proceeds once all costs have been settled. Manolete is therefore in exactly the same position as the creditors and is therefore fully aligned with the creditors and motivated only to maximise the “after cost recoveries”. This is the critical difference between running a case on the CFA/ATE model versus running a case on the Manolete model.
The following article from Irwin Mitchell summarises the position on the Hunt case: http://www.irwinmitchell.com/newsandmedia/2015/june/stevensdrake-ltd-v-hunt-and-others-jq-146308
The full judgment can be seen at: http://www.bailii.org/ew/cases/EWHC/Ch/2015/1527.html