The moral of Higgins v Morgan  and of Hirachand v Hirachand (CA)(2021) is to mediate early in order to contain the risk of a judge making an award of financial provision that includes an element of a CFA success fee that is impossible to calculate with any precision because as HHJ Cawson QC concluded in Higgins,
‘ 133. I do not agree with Mr Willetts that awarding some part of the CFA success fee would necessarily be contrary to s. 1(2)(b), because it involves providing for something other than maintenance. To the contrary, I consider it relevant for the purposes of s. 3(1)(a) of the 1975 Act to the question of the financial resources and financial needs which Mr Higgins has or is likely to have in the foreseeable future. This is because if I do make an award in his favour so as to trigger “success” and a requirement to pay the success fee, which cannot as a result of s. 58A(6) of CALSA be recovered from the Defendants as costs, then his liability to pay the success fee will be bound to affect his ability to maintain himself to the extent sought to be achieved by the award. I consider that Cohen J was thus correct at  in Re H to consider it appropriate to consider the liability for the CFA success fee as part of the claimant’s needs.
134. However, there is plainly a tension, in my judgment, between giving effect to s. 3(1)(a) of the 1975 Act in taking into consideration the success fee on the basis that it would affect the claimant’s ability to maintain himself on the one hand, and the policy considerations behind s. 58A(6) of CALSA on the other hand in not requiring the opposing party to litigation to meet the payment of success fees, a factor taken into account by Deputy Master Linwood in In re Clarke, but not seemingly by Cohen J in Re H.
135. On the other hand, the actual effect of s. 58A(6) is simply to prevent a “costs order” being made so as to permit the recovery of the success fee. It is not in terms outlawing the making of an order under the 1975 Act that includes an element of successf fee within the quantum of the award because that has been taken into account as a consideration in respect of the claimant’s needs. I take Mr Willetts’ point in respect of CPR 36.17(4) that circumstances might arise in which an element of the success fee is brought into account in calculating the punitive sums provided for thereby. However, even if this can properly be construed as a “costs order”, the difficulty occasioned by any unlawfulness could be dealt with by the exercise of the Court’s power under CPR 36.17(4) to depart from the operation thereof, given that the relevant provisions only apply “unless [the Court] consider it unjust to do so”. This exception could be used to avoid any difficulties of the kind that Mr Willetts raises.
136. The overall conclusion that I come to is that I am required to take into account the success fee in considering Mr Higgins’ financial resources and financial needs for the purposes 29 of s. 3(1)(a), but that the policy considerations behind s. 58A(6) CALSA fall within the category of “any other matter” which the Court is entitled to, and in my view should take into account for the purposes of determining the manner in which it should exercise its powers under s.2 of the 1975 Act. 137. I am not persuaded that it is appropriate to take into consideration the respective merits of the case in deciding how much of the success fee ought to be recoverable as part of an award under the 1975 Act, even on the basis of submissions made post judgment. Apart from the difficulties that is likely to create so far as questions of privilege are concerned, I consider it to be an inherently unreliable exercise. I consider that I am entitled to take a rather broader view of the position and have regard to the size of the estate, the amount of the likely success fee compared with the award actually made, and the fact that in many cases, particularly where significantly less is recovered than claimed, some agreement for payment of a significantly smaller success fee might well be negotiated, even if the same is technically payable under the relevant CFA. 138. Taking these broad considerations into account, and having regard to the policy considerations behind s. 58(6)(A), I consider that the appropriate course is to increase the award to £55,000 to include an element of success fee provided that evidence can be produced, in an appropriate way, to prove that the success fee has become payable. Overall conclusion
139. On the basis of my above findings, I propose to make an award of a lump sum payment of £55,000 out of the Deceased’s estate pursuant to s. 2(1)(a) of the 1975 Act, subject to the matters referred to in paragraph 138 above.
140. Following the circulation of the draft of this Judgment, Mr Gomer quite properly pointed out that it did not explain how the interim award referred to above ought to be taken into account for the purposes of a final award, bearing in mind that a lump sum of £4,000 was paid pursuant to the interim award, and that some 8 monthly payments of £1000 have been paid to date pursuant thereto, giving a total of £12,000. My intention had been that the award provided for in this judgment should be in addition to the sums already paid and received pursuant to the interim award bearing in mind that the £4,000 element thereof related to a specific debt in respect of arrears of rent, and the figure for maintenance referred to in paragraph 131(c) above was intended to cover the position going forward rather than dealing with the position retrospectively. Whilst the 8 monthly payments of £1000 per month exceed the monthly deficiency identified in Mr Higgins’ Statement of Means as at April 2021, I consider it necessary to bear in mind that Mr Higgins evidence in his first witness statement as to the then monthly deficiency, and that COVID-19 began to have a serious effect from as long ago as March 2019. It is in the light of these considerations that I proceed on the basis that the interim award stands insofar as it has taken effect to date, and that insofar as may be necessary, the figure of £12,000 paid be treated as additional in the final award to the figure of £40,800 referred to in paragraph 132 above, and thus to the figure of £55,000 referred to in paragraph 139 above. However, for the avoidance of doubt, so far as any further monthly payment or 30 payments of £1,000 since the date of the trial are concerned, including the payment due in October 2021, these are to be included within the figure of £40,800, and thus within the figure of £55,000.
141. There is one further postscript to add following the circulation of my draft judgment. On 15 October 2021, and following the circulation of my judgment, the Court of Appeal handed down judgment in an appeal from the decision of Cohen J in Re H (supra) – see Hirachand v Hirachand  EWCA Civ 1498. The decision of Cohen J was affirmed, and Mr Gomer and Mr Willetts have each confirmed that they do not seek to content otherwise than that the decision of the Court of Appeal was consistent with my own reasoning on the issue as to whether, and if so how, the CFA success fee should be taken into account. In these circumstances, I have not considered it necessary to rewrite the relevant parts of the judgment dealing with this issue in order to take into account the decision of the Court of Appeal.’
See also my recent blog – Inheritance Act – 25% CFA cases – Hirachand v. Hirachand (CA) (2021): Inheritance Act – 25% CFA cases – Hirachand v Hirachand (CA)(2021) | Carl’s Wealth Planning Blog
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