The appellant, a police officer with the Metropolitan Police Service (‘the MET’), and a number of other officers brought a group litigation action against the MET for alleged unpaid overtime and failure to pay certain other allowances.  

The action was settled and, as part of the settlement agreement, certain amounts were paid to the appellant (and the other officers) relating to certain legal expenses of the claimants and the cost of insurance against a possible liability to legal costs of the MET should the claim fail. 

To fund the legal proceedings against the MET, the claimants entered into a damages-based fee agreement with solicitors and counsel. The claimants also took out insurance against the risk of having to pay the MET’s legal costs if the claimants lost their claim, in return for a premium. 

The MET subsequently entered into a settlement agreement with the claimants, under