Kerry Underwood

ASSIGNMENT OF CONDITIONAL FEE AGREEMENTS: UNIFIED

with 15 comments


This piece brings together all other pieces and is correct and complete up to 20 June 2016.

 

This is one of the elephants in the Jackson room, entirely unaddressed in the Jackson Report, the implementation speeches, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 or the Conditional Fee Agreements Order 2013.

 

OVERVIEW

 

Novation

 

Novation involves a three party agreement where both the original parties to the contract and the new party agree that the original agreement comes to an end and a new agreement comes into being between one of the original parties and the new party and in relation to the same subject matter and on the same terms.

 

Thus one party is substituted by the new party and the first contract ends except for determining any rights or liabilities under it, that is there is no continuing obligation between the parties to the original contract.

 

Thus there are two contracts.

 

In an old-fashioned hourly rate retainer it would not normally make any difference as to whether the change in status was in fact an assignment or a novation as the original parties would need to deal with the obligations to one another prior to transfer. For example a client would owe the original solicitor fees up to the date of the transfer/novation. It is the line in the sand caused by the abolition of recoverability and also the fact that no fees are due from a client in a No Win No Fee Agreement until and unless the case is won.

 

Assignment

 

In contrast an assignment is an agreement between one of the original parties, the assignor and a new party, the assignee and does not require the agreement of the other original contracting party.

 

An assignment creates no new right but merely transfers existing rights under a contract from one party, the assignor, to another, the assignee, typically from the old firm of solicitors to the new firm of solicitors and the assignee can then enforce those rights without the consent of the other original party.

 

Benefits and Burdens

 

Generally an assignment can only transfer the benefit of the contract and not the burden.

 

In a solicitor-client retainer the benefit of the contract from the solicitor’s point of view is the right to payment from the client. That can in theory be transferred.

 

However the burden on the solicitor, that is the obligation to work for the client, cannot be transferred.
The reason for this restriction is that a party is entitled to contract with a particular individual or firm and to expect that work to be done by that body. Thus a client may be unconcerned as to who is to receive the cheque for the work but is likely to be very concerned about who is actually doing the work. Consequently the law generally does not allow one contracting party to pass the burden to another.

 

Obviously if the other party, that is the client, consents then there is no problem but that potentially then turns what looks like an assignment into a novation.

 

Formalities

 

Section 136 of the Law of Property Act 1925 requires that the assignment of a chose in action:-

 

  1. Must be in writing under the hand of the assignor; and that

 

  1. Express notice of the assignment must be given to the third party, that is the client; and that

 

  1. The assignment must be absolute. Thus is cannot obtain a provision that it is conditional only on a certain event taking place.

 

Personal Contracts

 

The general principle is that any contract involving personal service can never be assigned – see Griffith v Tower Publishing [1897] 1 Ch 21.

 

The general view of the courts is that a contract between solicitor and client is very much one of personal service, most recently confirmed by the Court of Appeal in

 

Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2015] EWCA Civ 18

 

It was to preserve that personal service element that the court allowed assignment in

 

Jenkins v Young Brothers Transport Ltd [2006] EWHC 151 (QB)

 

The High Court relied on the concept of “conditional burden” which apparently applies where the burden is a condition of and related to the benefits. See

 

Halsall v Brizell [1957] Ch 169

 

Thamesmead v Allotey, Court of Appeal, 13 January 1998, and

 

Rhone v Stephens [1994] 2 AC 310

 

Those cases involve the transfer of land with the benefits and burdens passing, for example restrictive covenants and it may be thought that that concept is not easily transferable to Conditional Fee Agreements.

 

The potential worst case scenario is that the court finds that at the date of transfer a new Conditional Fee Agreement was created on the same terms as the old agreement. Thus recoverability of the success fee is lost and unless the pre-April 2013 agreement had a 25% damages limitation on the success fee then that new one is unenforceable as it does not comply with the new regulation requiring a 25% success fee damages cap.

 

This can be avoided by having a new post-April 2013 compliant Conditional Fee Agreement that only comes into effect if the original pre-April 2013 agreement is for any reason found not to have been assigned. In a different context this principle was approved in

 

Forde v Birmingham City Council [2009] EWHC 12 (QB)

 

To rub salt into the wound it is possible that the client who no longer has recoverability of an additional liability does not get the protection of Qualified One-Way Costs Shifting. I deal with this in Qualified One-Way Costs Shifting and there are at present conflicting first instance cases on this point.

 

The same point applies in relation to the 10% uplift on general damages – see Simmons v Castle [2012] EWCA Civ 1039

 

There is a further, largely theoretical, issue and that is that if there is a new contract caused by novation the on any solicitor and own client assessment the court must take into account the facts and circumstances as they reasonably appear to the solicitor “at the time the [CFA] was entered into and at the time of any variation thereof.”

 

However as will be seen by that wording, there is in fact no requirement to assess risk. Nevertheless if, for example, liability had been admitted between the original Conditional Fee Agreement being entered into and the novation that would theoretically allow the court to lower the success fee payable by the client to the new solicitor.

 

The issue is thrown into sharp relief by the abolition of recovery of success fees.  If a pre 1 April 2013 Conditional Fee Agreement is assignable then the success fee remains recoverable; if not then in a post 31 March 2013 “assignment” the success fee is not recoverable and the defendant tortfeasor receives a windfall.  There is also an issue as to whether any costs, that is base costs as well as the success fee, are recoverable for work done before the non-assignment. On the face of it there is no valid retainer and therefore no recovery of any fee.

 

Jones v Spire Healthcare: A Decision not to be relied upon

 

In Jones v Spire Healthcare Ltd, Liverpool County Court, 11 May 2016 – case no. A13YJ811

 

a Circuit Judge, allowing an appeal from a District Judge, held that an insolvent firm of solicitors can validly assign its entitlement and responsibility under a Conditional Fee Agreement with a client to another firm of solicitors.

 

If it could not do so then the agreement would be a novation, that is a new agreement, and the costs of the insolvent firm would be unrecoverable.

 

If no new compliant agreement was entered into following a statutory change in relation to technical requirements, as happened in April 2013 in relation to conditional fee agreements, then the agreement would not be enforceable by the new firm and so no costs at all could be recovered from the losing party.

 

This would be to the disadvantage of any creditor in the administration and would represent a windfall to a losing defendant.

 

The Circuit Judge analyses the law in relation to Conditional Fee Agreements and in relation to assignment in considerable detail.

 

The benefit of a contract, other than one which involves personal skill and confidence dependent upon a particular individual discharging obligations under it, can be assigned, whereas the burden cannot, subject to certain exceptions.

 

One of those exceptions is where the benefits and burdens are inextricably linked, for example where entitlement to the right or benefit is dependent upon, or conditional upon, the discharge of certain responsibilities.

 

Here the court analysed at some length the decision of the High Court in

 

Jenkins v Young Brothers Transport Ltd [2006] EWHC 151

 

and followed it.

 

Here the court held that, as in Jenkins, the benefits and burdens were inextricably linked, thus allowing the burden to be assigned.

 

The court said:-

 

“Rules restricting burden assignment were clearly devised to protect the non-participating counterparty. This is clear from the Tolhurst case [Tolhurst v Associated Portland Cement Manufactures [1902] 2 KB 660]. In circumstances where there is tripartite involvement to the extent that not only do the assignee and the assignor agree to the shifting of the burden, but so too does the recipient of the benefit (here the Claimant) and a separate deed of assignment is entered into in relation to her own conditional fee agreement, it would be an unduly restrictive and overly legalistic approach to deny the parties the effect of what they intended.”

 

Comment

 

I must admit to an almost complete failure to understand the law on assignment and the logic of the law. Surely every contract involves a benefit and a burden, as otherwise there is no consideration and therefore no contract. Surely also one party’s burden is another party’s benefit. The benefit to the client is getting the work done and the burden is paying the fee. The benefit to the solicitor is earning the fee and the burden is doing the work. Surely also the benefit and burden must always be inextricably linked.

 

Leaving that aside in my view practitioners should be very wary of relying on this judgment in the sense of assuming that Conditional Fee Agreements can be validly assigned.

 

First of all a contract for the provision of legal services is one which involves personal skill and confidence dependent upon a particular individual discharging obligations under it and therefore the starting point is that such a contract can never be assigned.
The judge here worked on the basis that that was no longer the case in personal injury work –

 

“It is axiomatic that case handling these days is conducted at a distance, and that it would be very difficult to identify those cases where a particular client had been insistent on the continuity of a specific fee earner.”

 

Axiomatic means: “self-evident, indisputably true”. (Shorter Oxford Dictionary.

 

That statement by the judge is just plain wrong and is itself sufficient grounds to overturn the decision as it is central to his reasoning. It is putting the cart before the horse – just because firms like Barnetts conduct themselves in this way- and go bust- does not mean that all firms do.

 

The fact that work which is clearly personal in nature is being done in an impersonal, and generally poor quality way, by some solicitors does not alter the law of assignment.

 

What the judge is in effect saying is that there is a law against assignment of work which should be undertaken personally but if you don’t undertake it personally then you can avoid the law against assignment of such contracts.

 

That does not make sense.

 

The Judge may also have cared to look at why Barnetts went bust – they were the paradigm of a pile it high sell it cheap firm who did indeed do work at a distance. Does the Judge wish to encourage that?

 

Many commentators, including me, think that the decision in Jenkins is wrong. If there is a law preventing assignment of contracts involving personal skill and confidence then the fact that assignment may achieve that objective, as in the Jenkins case, does not mean that the contract is in fact capable of assignment.

 

It can be argued that the law against assignment is a common law principle and that the whole point of common law is that it evolves and that therefore the public policy reasons for not allowing assignment in contracts of a personal nature were precisely the public policy reasons which allowed the Jenkins exception.

 

Even if all of that is true that does not justify the decision in this case.

 

In any event another court could distinguish this case on the ground that the original firm of solicitors was insolvent and therefore could not continue to do the work. The contract was frustrated.

 

A different court may take a very different view in relation to a firm which is solvent but simply chooses to abandon its responsibilities to its personal injury clients by selling them on.

 

Neither did the court here consider the issue of referral fees. Such fees are illegal in personal injury work and invalidate the retainer.

 

I do not know the arrangements in this case but if a firm of solicitors buys out the personal injury work from another firm, that is the new firm obtains personal injury cases by paying a fee to the old firm, then on the face of it that is an illegal referral fee, which whilst attracting no criminal sanction, invalidates the retainer.

 

A High Court or Court of Appeal decision on the assignment of Conditional Fee Agreements would be welcome.

 

In the meantime I probably need to read a book on the subject, or perhaps write one.

 

Change of status of client

 

First I look at CFAs in relation to a change in the status of client’s post-Jackson, that is children attaining majority, those losing capacity, clients dying and clients becoming bankrupt, and a corporate client changing its legal status.

 

 

Children attaining majority

 

As long as the minor stays a minor, then there is no problem, and the success fee and base costs are recoverable from the losing party under a pre 1 April Conditional Fee Agreement.

 

The potential problem is in relation to a case where the Conditional Fee Agreement was signed prior to 1 April 2013 and the minor achieved majority on or after that date.  There is the issue of whether costs incurred under the original CFA are recoverable, irrespective of the issue of the success fee, as if the original agreement cannot be assigned, then there is no lawful retainer in place in relation to pre-majority work.  The indemnity principle means no retainer equals no fee.

 

Once the minor achieves his or her majority the role of the Litigation Friend falls away and, on the face of it, so does the Conditional Fee Agreement signed by the Litigation Friend.

 

Two potential consequences flow from this:

 

 

  • that the retainer runs only from the date of the new Conditional Fee Agreement leaving the solicitor with an indemnity principle issue in relation to costs incurred before that date.

 

This penalizes a child for being a child on 31 March 2013. A claimant who was an adult on 31 March 2013, or a child who had achieved his or her majority by that date, would have no such problem.

 

This gives an unwarranted windfall to the tortfeasor.

 

It is strongly arguable that the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is thus not compliant with the Human Rights Act 1998.

 

Section 44 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 was implemented by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No. 5 and Saving Provision) Order 2013. Article 4 contains the saving provisions and it would have been simple to add

 

“(g)        proceedings where a minor whose Litigation Friend entered into a Conditional Fee Agreement before 1 April 2013 achieves his or her majority during those proceedings.”

 

To rub salt in to the wound such a claimant does not get Qualified One Way Costs Shifting as at some stage there had been a Conditional Fee Agreement with a success fee (Landau v The Big Bus Company, 31 October 2014, Master Haworth, SCCO). See my piece – Qualified One Way Costs Shifting.

 

For the same reason it appears that the 10% Simmons v Castle (No 2) [2012] EWCA Civ 1288 general damages uplift does not apply.

 

In cases involving minors achieving their majority the courts are likely to hold that costs, including the recoverable success fee, are recoverable under the original Conditional Fee Agreement and thus no problem is caused by a child being represented under a pre 1 April 2013 CFA attaining majority.

 

In Dunn v Mici [2008] EWHC 90115 (Costs) the Supreme Court Costs Office worked hard to preserve the validity of a CFA on a different point, but with the same potential effect. The court was not dealing with success fee recoverability but that does not affect the rationale of the decision; if the original Conditional Fee Agreement entered in to by the minor is valid, then costs under that original agreement, including the success fee, are recoverable.

 

Dunn v Mici concerned a CFA under the since repealed 2000 Regulations, which imposed heavy regulatory burdens upon solicitors in Conditional Fee cases. The defendant argued that the claimant’s solicitor had failed to comply with those Regulations and so no costs were payable by the claimant and that by operation of the indemnity principle the losing defendant’s liability was nil.

 

As the claimant had been a minor when the Conditional Fee Agreement was entered into, it had been signed by his mother. At paragraph 20 the court said:-

 

“…a principal can act through an agent; here, the principal was Mr Dunn and his mother was his agent. Second, there was no requirement for a litigation friend to be appointed. This would only have been obligatory on the issue of proceedings had Mr Dunn then been a minor, but by that date, he had already attained his majority.”

 

In any case where proceedings had not been issued when the Litigation Friend was appointed then the principles set out in Dunn v Mici apply.

 

If, unusually, proceedings had been issued before the CFA was signed, then there would be a Litigation Friend, who would doubtless have signed the CFA.

 

However, that does not prevent the Litigation Friend from also being the agent of the principal, the principal being the minor.

 


 

Contracts for Necessaries

 

There is a strong argument that a CFA to pursue a lawsuit is a contract for necessaries; such contracts have always been treated differently, and even if made by a person under a legal disability, including a minor, are valid and enforceable.

 

Consequently a minor is free to enter in to a binding and enforceable Conditional Fee Agreement on the basis that it is a contract for necessaries.

 

This is important in relation to the Principal-Agent argument as there must be a valid Principal for there to be a valid Agent.

 

 

In Practice

 

Solicitors should rely on the original CFA and seek recovery of costs, including the success fee, as usual.

 

Additionally the client should sign a statement as follows:-

 

“I confirm that the attached document is a true copy of a Conditional Fee Agreement dated [                     ] entered into between [ solicitor ] and [ name of signatory ] and I confirm that [ name of signatory ]was at all times acting as my lawfully appointed Agent in relation to the Conditional Fee Agreement and had full authority to sign that agreement on my behalf.

 

I have now achieved my legal majority and instruct [solicitor] to continue to act for me under this Conditional Fee Agreement.

 

Insofar as it is necessary for me to ratify this agreement, I hereby do so.”

 

This document does not need to be disclosed to the paying party until and unless the paying party takes the point on assessment of costs.

 

Additionally the client should enter in to a fresh CFA on a “belt and braces” basis but this CFA should not be disclosed to the paying party until and unless the validity of the original agreement is challenged. This does at least give a right to costs from the date of the new agreement if the original one is held to be invalid. In such circumstances the success fee will not be recoverable.

 

In Forde v Birmingham City Council [2009] EWHC 12 (QB) the Queen’s Bench Division of the High Court held that retrospective CFAs are permissible and that no consideration is required. Any changes to the basis of the retainer must be made prior to the entitlement to costs becoming crystallized. The terms of the backdating must be such that a reasonable client would not object, the point being that the actual client is unlikely to object because she will not be paying anything.

 

If the second CFA failed then resort could be had to the first one. The court also held that s 58(1) of the Courts and Legal Services Act 1990 (CLSA 1990) and the changes made thereto meant that even a seriously flawed CFA is not illegal, but merely unenforceable. (See paragraph 206 of the judgment).

 

Thus the client should also sign a retrospective, not backdated, CFA on the same basis as the original one. This CFA should not be disclosed to the paying party until and unless the validity of the original agreement is challenged.

 

There is another, now very significant, problem in relation to children cases where, for any reason, there is no valid pre 1 April 2013 Conditional Fee Agreement; of course the reason may be that the cause of action did not arise until after 31 March 2013.

 

The problem is that most judges are refusing to allow any deduction from a child’s damages in order to fund the claimant solicitor’s success fee. Thus in the event of a post 31 March 2013 Conditional Fee Agreement, or a pre 1 April 2013 Conditional Fee Agreement that is not assigned, the solicitor is likely to get no success fee. As recoverable costs in portal cases are not, on their own, economically viable, it is not now feasible for lawyers to act for children in such cases.

 

This problem will be greatly enhanced if the small claims limit in personal injury cases is raised.

 

With effect from 6 April 2015 the Civil Procedure Rules allow summary, rather than detailed, assessment of costs payable by a child to his or her own solicitors (CPR 46.4(5)). However the procedure is wholly unworkable – see my blog Children’s Cases – April is the Cruellest Month.

 

 

Death and Assignment of Conditional Fee Agreement

 

The same issues apply, that is in relation to the recoverability of the success fee where the original Conditional Fee Agreement was entered into before 1 April 2013, and the client died on or after that date and also in relation to pre-transfer base costs, whenever the original Conditional Fee Agreement was entered into.

 

The issue of base costs has always existed but the whole subject has been brought into the sharper focus by the abolition of the recoverability of the success fee, that is the consequences are potentially more severe.

 

There is no case law on this specific point, that is whether a personal representative can rely on a Conditional Fee Agreement entered in to by the deceased.  In the absence of a Conditional Fee Agreement, there is not normally a problem as work done to the date of death is a debt due from the estate on a quantum merit basis.  That is not the case with Conditional Fee Agreements and as the condition precedent required before payment is due – a win – has not occurred, then on the face of it no payment is due from the estate.

 

If no payment is due from the estate, then the indemnity principle kicks in, no liability = no recovery.

 

Usually solicitors have asked the Personal Representatives to adopt the original Conditional Fee Agreement and to accept, on behalf of the estate, liability for costs incurred up to the date of death.

 

The old Law Society Model Agreement, applying to pre 1 April 2013 Conditional Fee Agreements, said:

 

“(c)         Death

 

This agreement automatically ends if you die before your claim for damages is concluded.  We will be entitled to recover our basic charges up to the date of your death from your estate.

 

If your personal representatives wish to continue you claim for damages, we may offer them a new conditional fee agreement, as long as they agree to pay the success fee on our basic charges from the beginning of the agreement with you”.

 

I have considerable doubts about the enforceability of that paragraph.  As at the time of death the case has not been won and it is strongly arguable that there is no liability for costs.  At the point of death the agreement terminates.  Why is anything due?  Why are such costs recoverable from the other side?

 

It seems to me that if the personal representatives have “a new conditional fee agreement” post 31 March 2013 then the success fee is clearly not recoverable from the other side as it is a “new” post 31 March 2013 agreement.

 

If the estate should be made liable to pay the success fee, then this may be one of those rare cases where a Damages-Based Agreement may be suitable as the 25% charge is not related to the amount of work done, and therefore it does not matter when the agreement is entered into.

 

Clearly if the client dies after 31 March 2013 then a retrospective or backdated new CFA does not help in relation to the recoverability of the success fee, but may help in relation to recovery of base costs since death.

 

I advise that the following agreements be entered into:

 

  1. A backdated deed under seal whereby the Personal Representative, often a widow or widower, adopts the original Conditional Fee Agreement.

 

  1. A fresh Conditional Fee Agreement, without a recoverable success fee.

 

Number 1 is under seal to defeat any argument about lack of consideration as there is no need for consideration in a deed under seal, the point being that on the face of it the estate is not receiving consideration; it could go elsewhere and start again. Arguably the consideration is the agreement of the solicitors familiar with the matter to carry on, but the work already done, for which there is no legal liability to pay, is clearly past consideration and past consideration = no consideration.

 

In Forde v Birmingham City Council [2008] EWHC 90105 (Costs) the Costs Judge held that the agreement of a firm of solicitors to continue to represent a client where there were doubts about the validity of the first Conditional Fee Agreement did amount to consideration for entering into the second Conditional Fee Agreement .

 

This is the preferred option as if found to be enforceable it backdates recovery of basic charges to the beginning and nothing is lost.

 

However if that adoption is held not to be valid, then the second Conditional Fee Agreement comes in to play and at least base costs are recoverable from the date of the second Conditional Fee Agreement.

 

Although the facts of the case meant that there were not in fact different simultaneous agreements in place, the concept of simultaneous Conditional Fee Agreements was recognized by the High Court in Forde v Birmingham City Council [2009] 1 WLR 2732.

 

In that case the High Court held the second of two Conditional Fee Agreements to be valid and enforceable, even though it was retrospective and the retrospective period covered a period prior to 1 November 2005, when there was a very different, much stricter, regime in place.

 

Consequently Conditional Fee Agreements which were defective under the pre 1 November 2005 regime could be “cured” by entering into a new, but retrospective, Conditional Fee Agreement.

 

It is clear beyond doubt that retrospective Conditional Fee Agreements are permissible, see, for example Holmes v Alfred McAlpine Homes (Yorkshire) Ltd [2006] EWHC 110, quoted in Forde.

 

That raises the issue of a retrospective, or backdated, Conditional Fee Agreement taking effect from pre 1 April 2013, so as to seek to preserve recoverability of the success fee. However the Personal Representatives would have no legal existence or standing prior to death, and thus on the assumption that the problem has been caused by a post Jackson death of a person with a pre Jackson Conditional Fee Agreement, this does not help.

 

 

Wills

 

Executors under a Will have immediate power to enter in to a Conditional Fee Agreement on behalf of the estate, but potential administrators have no power until Letters of Administration have been granted by the court.

 

Consequently administrators should enter into the new Conditional Fee Agreement retrospective to the date of death so as to ensure recovery of all base costs since then; realistically executors under a Will, often close relatives of the deceased, are unlikely to get round to dealing with a new Conditional Fee Agreement straightaway and so they too should enter into a Conditional Fee Agreement retrospective to the date of death.

 

Generally, when entering in to a Conditional Fee Agreement solicitors should insist that the client has a will, so as to avoid the potential gap between death and Letters of Administration.  This makes sense in any case, but especially in a serious personal injury case where there is an increased risk of the client dying during the currency of the matter.

 

It is also an excellent opportunity to market the firm’s will-writing service.

 

 

Solicitor Executors

 

If the client appoints as executors partners of the firm of solicitors dealing with the litigation then there is a seamless transfer of power on death to deal with that litigation.

 

 

Death of a Litigation Friend

 

Supposing that a client lacks capacity throughout the claim and the litigation friend dies. Can a pre April 2013 Conditional Fee Agreement between a dead litigation friend be taken over by a new litigation friend or is a new post Legal Aid, Sentencing and Punishment of Offenders Act 2012 Conditional Fee Agreement necessary, with the risk of loss of recovery?

 

My view is that a fresh Conditional Fee Agreement is not necessary. The true party has been the same throughout and the solicitors have been the same throughout and it is clearly a pre-April 2013 Conditional Fee Agreement. The litigation friend is just that and is not a party to the litigation. All that needs to happen is that the new litigation friend be formally advised of their responsibilities, with the Solicitor’s Certificate for suitability etc. being dealt with. The litigation friend is just that – the friend in the litigation and that does not affect the underlying contractual relationship.

 

As a belt and braces policy I advise the adoption of the suggestion I have made above, but also to enter into a fresh Conditional Fee Agreement with the litigation friend but stated to be on the basis that it only comes into play if the original Conditional Fee Agreement is found, for any reason, to be no longer valid. The authority for more than one Conditional Fee Agreement being in place at any given time is Forde v Birmingham City Council [2009] 1 WLR 2732.

 

In my view a court will work very hard to preserve the validity of the original Conditional Fee Agreement, and therefore recoverability of the success fee and indeed pre-death of litigation friend base costs as failure to do so would clearly discriminate against disabled people and is arguably unlawful and a breach of the Human Rights Act 1998. Litigation friends will generally only be necessary where a party is a minor or lacks mental capacity. Both situations involve protected characteristics for the purposes of discrimination legislation and both are afforded protection under the European Convention on Human Rights.

 

In any event a contract between a patient lacking capacity and a solicitor is not void but is voidable and so even if the contract was between the claimant and the patient that would not be fatal to the agreement.

 

That was the rule laid down in Imperial Loan Company Ltd v Stone [1892] 1 QB 599.

 

The paying party has no standing to interfere with that legal position and has no power to argue that the claimant/patient should be required to void the contract.

 

It would be curious indeed if a contract between someone lacking capacity and made pre-April 2013 would be upheld but one where a litigation friend had been properly appointed, but then had died, would not be upheld.

 

In the very recent decision in Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2015] EWCA Civ 18 the Court of Appeal confirmed that the liability to pay a solicitor’s costs remains with the litigant, even a litigant without capacity, and not with the litigation friend. Thus if the client lacks capacity at the time of retainer, then that retainer is still with the litigant and the litigation friend is merely a statutory agent of the incapacitated litigant, and not a principal to the retainer.

 

This is essentially the same line of reasoning as the court adopted in Dunn v Mici [2008] EWHC 90115 (Costs) in relation to minors.

 

 


 

Bankruptcy of client

 

Section 306 of the Insolvency Act 1986 provides:

 

“(1)        The bankrupt’s estate shall vest in the trustee immediately on his appointment taking effect or, in the case of the official receiver, on his becoming trustee.

 

(2)          Where any property which is, or is to be , comprised in the bankrupt’s estate vests in the trustee (whether under this section or under any other provision of this Part), it shall so vest without any conveyance, assignment or transfer.”

 

Section 283 reads:

 

“(1)        Subject as follows, a bankrupt’s estate for the purposes of any of this Group of Parts comprises –

 

  • all property belonging to or vested in the bankrupt at the commencement of the bankruptcy, and

 

  • any property which by virtue of any of the following provisions of this Part is comprised in that estate or is treated as falling within the preceding paragraph.

 

(2)          Subsection (1) does not apply to:

 

  • such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him in his employment, business or vocation;

 

  • such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying basic domestic needs of the bankrupt and his family”.

 

Section 436 says…

 

“ “property” includes money, goods, things in action, land and every description of property wherever situated and also obligations and every description of interest, whether present or future or vested or contingent, arising out of, or incidental to, property…”.

 

Thus, on the face of it a legal action, being a thing in action, is property and vests in the trustee.  However that is not the whole story as the courts have consistently held that certain actions, including personal injury general damages only actions, do not vest in the trustee.

 

In Heath v Tang [1993] 3 All ER 694 the Court of Appeal said:

 

“The property which vests in the trustee includes “things in action”: see s.436 of the 1986 Act.  Despite the breadth of this definition, there are certain causes of action personal to the bankrupt which do not vest in his trustee.  These include cases which –

 

“the damages are to be estimated  by immediate reference to pain felt by the bankrupt in respect of his body, mind, or character, and without immediate reference to his rights of property.”  (See Beckham v Drake [1849] 2 HL Cas S79 at 604, 9 ER 1214 at 122 per Erle J.  See also Wilson v United Counties Bank Ltd [1920] Ac 102, [1918-19] All ER Reg 1035).

 

“Actions for defamation and assault are obvious examples.  The bankruptcy does not affect his ability to litigate such claims.  But all other causes of action which were vested in the bankrupt at the commencement of the bankruptcy, whether for liquidated sums or unliquidated damages, vest in his trustee.  The bankrupt cannot commence any proceedings based upon such a cause of action and, if the proceedings have already been commenced, he ceases to have sufficient interest to continue them.  Under the old system of pleadings, the defendant was entitled to plead the plaintiff’s supervening bankruptcy as a plea in abatement.  Since the Supreme Court of Judicature Act 1875, the cause of action does not abate but the action will be stayed or dismissed unless the trustee is willing to be substituted as plaintiff: see

 

Jackson v North Eastern Railway Co (1877) LR 5 Ch D 844.

 

In  Ord v Upton [2000] 1 All ER 193

 

the Court of Appeal quoted that passage and said:

 

“Section 436 is not in truth a definition of the word “property”. It only sets out what is included. As will appear later from the cases that have been decided over many years, actions which relate to a bankrupt’s personal reputation or body have not been considered to be property and therefore they do not vest in anybody other than the bankrupt. They relate solely to his body, mind and character and any damages recovered are compensation for damage to his body, mind and character as opposed to other causes of action which have been considered to be a right of property. Thus causes of action to recover damages for pain and suffering have been held not to vest in the trustee. That has led to a number of oddities. For example, the parties agree that if at the time of the bankruptcy, the bankrupt had in his bank a sum which included money paid as damages for a libel, that sum would vest in his trustee because the right to the money formed part of his estate and therefore was available to pay off the bankrupt’s creditors. That was to be contrasted with an action personal to the bankrupt, such as a libel action, which was not settled before the end of the bankruptcy. In such circumstances the cause of action would remain with the bankrupt as would any damages awarded after discharge. If a cause of action is not personal to the bankrupt, it vests in the trustee and therefore any damages awarded whether before or after the discharge will be available to discharge the bankrupt’s liabilities.”

 

In Ord the claim was a negligence action for personal injury, including special damages, and the issue was whether the existence of the special damages claim took the case out of the exception, meaning that it vested in the trustee, or remained wholly within the exception, or could be severed so that the general damages claim remained with the bankrupt but the special damages claim vested in the trustee.

 

The Court of Appeal held that that was a single, indivisible action and therefore it either all remained with the bankrupt or all vested in the trustee, and that it was a hybrid claim, in part personal in part relating to property.

 

The Court of Appeal held that the action vested in the trustee and to fall within the exception a claim must relate only to a cause of action personal to the bankrupt, adding “All causes of action which seek to recover property vest in the trustee whether or not they contain other heads of damage to which the bankrupt is entitled.”

 

In Beckham v Drake (1849) 11 HLC 1213 the Court of Exchequer Chamber repeatedly used the term “assignees” in relation to the passing of the action to the trustee, and the terms was also used in Stanton v Collier (1854) 23 LJQB 116  and subsequent cases.

 

In Ord the Court of Appeal undertook an extensive review of the authorities and concluded that although the whole of the action vested in the trustee the actual general damages belonged to the bankrupt and did not form part of the trustee’s fund, and thus the damages must be split between the trustee and the bankrupt.

 

Thus if the claim is for general damages only then the claim does not vest in the trustee at all and thus the original Conditional Fee Agreement continues in place and the base costs, together with a recoverable success fee in a pre 1 April 2013, can be recovered in the usual way.

 

If the claim includes any element of special damages then the whole claim passes to the trustee, although any general damages recovered will belong to the bankrupt.

 

If the claim passes to the trustee then the issue arises as to the validity of the original Conditional Fee Agreement, that is can it be validly assigned?

 

As set out above the courts frequently referred to the trustee as being an assignee of the action, which lends support to the idea of the Conditional Fee Agreement being assignable.

 

Clearly if the special damages form only a small part of the claim a policy decision needs to be made as to whether to jettison that part of the claim, leaving a general damages claim only which undoubtedly remains with the bankrupt personally and thus no issue arises as to the validity of the original CFA.

 

If that is not an option, then the Trustee should be strongly advised to have the original CFA assigned to him or her.

 

There is no authority in relation to assigning the Conditional Fee Agreement in such cases. However it seems to me that if the chose in action can be assigned, then the retainer, which is inevitably parasitic upon the chose, must also be capable of assignment.

 

It will virtually always be in the interests of the creditors for this to happen as it represents the best opportunity of maximising the recovery of assets and if the success fee remains recoverable from the other side, rather than being payable out of damages, then that represents significant extra assets for the creditors.

 

Section 304(1) of the Insolvency Act 1986 reads as follows:-

 

“(1)        Where on an application under this section the court is satisfied—

 

  • that the trustee of a bankrupt’s estate has misapplied or retained, or become accountable for, any money or other property comprised in the bankrupt’s estate, or

 

  • that a bankrupt’s estate has suffered any loss in consequence of any misfeasance or breach of fiduciary or other duty by a trustee of the estate in the carrying out of his functions,

 

the court may order the trustee, for the benefit of the estate, to repay, restore or account for money or other property (together with interest at such rate as the court thinks just)or, as the case may require, to pay such sum by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just.”

 

It is arguable that a failure by the Trustee to agree to the assignment of a Conditional Fee Agreement, especially a pre 1 April 2013 one, could result in a liability under section 304(1)(b).

 

 

Change of firm

 

Neither the Courts and Legal Services Act 1990, as heavily amended, nor the plethora of regulations, orders and statutory instruments dealing with Conditional Fee Agreements address the issue of assignment and thus the starting point is that common law principles apply.

 

The common law position is that the benefit of contract, but not the burden, can be assigned and therefore generally a Conditional Fee Agreement cannot be lawfully assigned to the new firm and thus the client must enter in to a new agreement with the new firm and thus forego the recoverable success fee.  For reasons I will deal with below that does not necessarily mean that recovery of the pre-transfer base costs is lost.

 

I must admit to struggling with the benefit/burden issue as all contracts must involve both, otherwise there is no consideration and no consideration equals no contract, unless it is a deed under seal.  Clearly from the client’s point of view the benefit is having the work done and the burden is paying the fee, but in reality the whole point of seeking to assign the agreement in these cases is to avoid the client paying any fee at all.  Thus from the client’s perspective what burden is assigned?  Of course in the Alice in Wonderland world of costs the indemnity principle means that the client has to have an entirely illusory liability to pay costs but it is entirely illusory and it is hard to see why a court applying common law principles should take any notice of illusions.

 

There is a further problem in that at common law there can be no assignment of a contract that is personal in nature, and a contract for the provision of legal advice is a classic example of such a contract.  Again one wonders how that proposition squares with the reality of a claims world in which many firms never see their client and where clients and cases are traded as mere commodities with the client meaning no more to his lawyer than a sack of corn.

 

Here I deal with possible practical ways round the Conditional Fee Agreement problem when it is the firm and not the client which changes.

 

There are at least sixpotential scenarios when the issue of assignment can arise:-

 

  1. that the client’s solicitor moves firm and that client wants to instruct that solicitor as he or she has trust and confidence in that solicitor;

 

  1. that the client loses trust and confidence in the existing solicitor and wishes to move to a new firm;

 

  1. that neither of the above applies but that the client moves firms of his or her own volition;

 

  1. the firm abandons that type of work and/or sells its caseload of that type of work to another firm.

 

  1. none of the above applies but the original firm ceases to exist through insolvency, lack of professional indemnity insurance, merger or any other reason;

 

  1. the legal status of the firm changes, e.g. through a merger or a partnership becoming a limited company.

 


 

Scenario 1

 

The client’s solicitor moves firm and that client wants to instruct that solicitor as he or she has trust and confidence in that solicitor

 

There is but one case on the subject and that is clearly not on all fours with the subject matter of this piece.

 

In Jenkins v Young Brothers Transport Limited [2006] EWHC 151 [QB]

 

the Queen’s Bench Division of the High Court found an exception to the general law against assignment in a case involving a Conditional Fee Agreement.

 

In Jenkins the solicitor dealing with Mrs Jenkins’ matter moved from one firm of solicitors to another and then to a third firm and on each occasion the Conditional Fee Agreement was assigned, creating two assignments and with three firms in all acting at some stage under the CFA.

 

The High Court held that where the events underlying the assignment were the trust and confidence that the client had in her solicitor the Conditional Fee Agreement could be assigned by one firm of solicitors to another.

 

The court worked hard to reach this conclusion, partly because any other decision would have given a windfall to the insurer and the courts do not like windfalls.  Not all of us are convinced of the correctness of this decision and indeed at paragraph 28 the High Court itself said that the facts in this case were singular and that it had not derived assistance from the authorities on the law of assignment.

 

Neither have I.

 

A key part of the court’s reasoning was that the relationship between client and solicitor involves personal confidence and that here that solicitor had moved firms and thus by allowing assignment the court was preserving, not breaking, that personal relationship for personal services.

 

This is scenario 1 above and my view is that a court looking at similar facts now would reach the same conclusion.

 

If the old firm merges with another law firm or is sold to another law firm and the actual solicitor who has conduct of the case works for the new entity and thus continues to deal with the matter, then the situation is no different from Jenkins v Young Brothers Transport Limited, and there should be no problem in assigning the original Conditional Fee Agreement.

 

 


 

Scenario 2

 

The client loses trust and confidence in the existing solicitor and wishes to move to a new firm

 

Scenario 2 involves trust and confidence, but the loss of it rather than the existence of it, by a client who is moving firms.

 

If this situation does not exist, that is that it will not be the same solicitor dealing with the matter, but the original firm no longer exists, then the client has no option but to move firm. There is no case law on this point in relation to conditional fee agreements.

 

If a firm falls into financial difficulties then clearly it is reasonable for the client to lose trust and confidence in that firm and it may well be that a court will arrive at the same conclusion as the High Court here, namely that it is sufficient to take the case out of the general rule against assignment.

 

However in the third scenario, where it is simply that the client wishes to move without having lost trust and confidence in their existing solicitor (Scenario 2) or without the client’s solicitor moving firm (Scenario 1), then I believe that the court is much less likely to find that there is a lawful assignment.

 

Scenarios 2 and 3 fall in between although if there is no inherent problem with the first firm (scenario 3) a client would be singularly badly advised to transfer firms from a position where the client has a recoverable success fee under a pre-1 April 2013 conditional fee agreement to a position whereby s/he has a post 31 March 2013 conditional fee agreement with a non-recoverable success fee.

 

Scenario 2, where the client loses trust and confidence in the existing solicitor, and thus wishes to move to a new firm, is difficult.  On balance my view is that a court would decline to hold that there is an assignment in such a case.

 

Scenario 4

 

Where the firm abandons that type of work and/or sells its caseload of that type of work to another firm

 

Scenario 4 can involve an overlap with Scenarios 1 or 2 as set out above.

 

Here I am assuming that the solicitor dealing with the matter has not moved firms and that the client has not lost trust and confidence in his or her existing solicitor at the existing firm but rather that the solicitor’s choice of firm has ceased to exist without the solicitor having conduct of the case going to the new entity.

 

My advice is that in such a situation the parties should:-

 

  1. Sign up to a new post 1 April 2013 Conditional Fee Agreement;

 

  1. Also have a Deed of Assignment entered into by the firm of solicitors and the client and assigning the original Conditional Fee Agreement to the new solicitor.

 

I cannot say with any confidence that the original Conditional Fee Agreement will be held to have been successfully assigned and therefore I cannot say that recoverability of the success fee from the other side will be achieved.

 

Defendants are likely to refuse to pay the success fee and indeed the pre-transfer costs in such circumstances as the lawfulness or otherwise of the assignment is potentially worth tens of millions of pounds to the insurance industry.

 

Furthermore the issue of whether this is a device to avoid the ban on referral fees is bound to be raised.

 

In the other scenarios there is a very significant risk that the courts will not hold an attempt to assign the Conditional Fee Agreement to be valid.

 

It is strongly arguable that the trading of cases and clients as commodities is the antithesis of any concept of preserving any form of personal relationship for personal services.  That is scenario 4.

 

In summary where there is any post 31 March 2013 change in the status of the solicitor acting under a conditional fee agreement there is a strong chance that the validity of the original retainer and its assignment will be challenged and that challenge may well be successful unless the Jenkins principle applies.

 

Scenarios 2 to 4 clearly fall outside Jenkins but in each case the original firm continues to exist and that provides a solution.

 

 

Solicitor’s costs for a period when the solicitor was not authorised to practice

 

In Jarrett v Tesco Store Ltd, Cambridge County Court 23 February 2015

 

the court found that the assignment of a Conditional Fee Agreement was ineffective in circumstances where it was originally assigned in February 2012 after the original firm of solicitors had closed and one of the partners decided to carry on in practice on his own but had not been authorised to do so under Rule 10.1 of the Solicitors Regulation Authority Practice Framework Rules 2011. The partner then joined another law firm and again the CFA was signed to that firm.

 

Here the court recognised that Jenkins v Young Brothers Transport Ltd [2006] EWHC 151 (QB) was authority for the proposition that there can be an assignment of a CFA from one firm to another. In that case the client followed the solicitor from one firm to another as he had trust and confidence in his skills and expertise.

 

However that did not extend to the unusual circumstances here where the client was seeking to recover solicitor’s costs for a period when the solicitor was not authorised to practice at all. The client’s trust and confidence could not properly repose in a solicitor whose Professional Practice Rules prevented him from acting as a solicitor at the relevant time.

 

Comment: The facts of this case are unusual and will not crop up very often.

 

 


 

Agency

 

As the old firm continues to exist then it can instruct the new firm on an agency basis as this preserves the original Conditional Fee Agreement and once the case is won then the client is liable to pay the original firm from the beginning under a pre 1 April 2013 Conditional Fee Agreement. Thus the success fee is recoverable, as well as all of the basic charges from the beginning. In other words the recovery is as though there had not been a change of solicitor.

 

Agency arrangements have a long history, with the concept of London Agents to deal with matters involving the courts in the capital very well established. Thus this model should be safe from attack, apart from the relatively minor issue of whether there was any duplication of work due to the agent having to re-read the papers. However this will only lead to a minor reduction in costs; it does not threaten the whole basis of the agreement.  It is simply a solicitor and own client costs or between the parties costs issue.

 

In such circumstances there is no need to serve Notice of Change.

 

If the old firm has sold its work to the new firm then it is likely that the two firms can agree to an agency arrangement.  The client may be less happy and clearly a firm that simply abandons the client and the work part way through a conditional fee agreement is not entitled to any costs at all if the client chooses to instruct a completely different firm, that is not the new firm to whom the work has been sold.  Any issue of breach of contract does not need to be considered – this is good old doctrine of frustration territory.

 

Note too that such an arrangement between the selling firm and the buying firm helps avoid the very real risk that, where a personal injury workload is sold to a new firm which goes on the record, there is an unlawful referral fee, that is the original firm referring, for a fee, the cases to the new firm.

 

If the client moves because she or he is unhappy with the old firm, then the client may not be happy about the old firm remaining on the record and involved.  That unhappiness is likely to disappear when the client understands that such an arrangement will mean that all of the damages are kept, rather than being subject to a 25% deduction in a post 31 March 2013 conditional fee agreement.

 

Likewise the client who moves for no good reason.  There it may be the sacked solicitor who is unhappy about staying involved, but in practice that solicitor has a much greater chance of recovering costs if its own original conditional fee agreement is relied upon, together with an otherwise unrecoverable success fee.

 

Scenario 5

 

Where the original firm ceases to exist through insolvency, lack of professional indemnity insurance, merger or any other reason

 

Scenario 5 is the most difficult one. If the firm is in administration then the firm continues to exist and the above arrangement works, with the new firm being the agent of the administrators, but it is a risky arrangement which jeopardises the incoming firm’s right to any fees at all.

 

In such a case the new firm should enter in to a new conditional fee agreement with the client so as to guarantee its own costs, albeit that no success fee will be recoverable from the other side.  That in turn means that no notice in Form N251 needs to be served as in a post 31 March 2013 conditional fee agreement the other party has no more right to be informed of the nature of the retainer than if it is an old-fashioned hourly rate one.

 

It is a matter for the firm as to whether it wishes to charge the client a success fee under the new agreement.  It is entitled to do so but it means that the client is losing out through no fault of their own.

 

The new firm should also enter into a deed of assignment with the administrators and the client, assigning the original conditional fee agreement, although for reasons set out above I have my doubts as to whether that works.

 

If possible the old firm should be kept going for the sole purpose of concluding cases with an existing conditional fee agreement and/or recoverable after-the-event insurance policy.  It is a matter between the firms as to how any recovered costs are distributed; the key is to maintain the right to recover all costs.

 

If this is not possible then consider having the old firm as a temporary trading name of part of the new/merged firm for the purposes of conducting the relevant cases.  A change of ownership of the firm does not, of itself, affect entitlement to costs.  If it were otherwise then every time a partner retired or a new partner entered the partnership, all previous work under a conditional fee agreement would be irrecoverable.

 

The same applies to a situation where the old firm still exists, but for whatever reason one party is not prepared to enter into an agency arrangement.

 

 

Quantum Meruit

 

In Forde v Birmingham City Council [2009] EWHC 12 (QB), the Queen’s Bench Division held that it is contrary to public policy to allow costs on a quantum meruit basis in relation to work done under an unenforceable conditional fee agreement. Such a claim would be available in every case of non-compliance and this would render the statutory prohibition on enforcement illusory.

 

There is no unjust enrichment of the client in such a case. The court, as a matter of justice, should not impose upon a client an obligation to pay in circumstances where Parliament has provided that the agreement under which he agreed to pay the costs should not be enforceable against him. (paragraph 206 of the judgment).

 

The agreement to continue to act in the case under the second Conditional Fee Agreement was adequate consideration. No presumption of under influence arose in such circumstances. The second Conditional Fee Agreement could be retrospective even though that retrospective period covered a period before 1 November 2005, that is a period under the old, much stricter, regime. Consequently, Conditional Fee Agreements which were defective under the 1 November 2005 regime could be ‘cured’ by entering in to a new, but retrospective, Conditional Fee Agreement.

 

Here, ultimately, no success fee was sought but the court held, obiter in the circumstances, that if a retrospective success fee was sought and was held to be contrary to public policy then that would not vitiate the second Conditional Fee Agreement as a whole. The court, obiter, held that a retrospective success fee is not contrary to public policy.

 

In an old-fashioned hourly rate retainer there is an obligation to pay, whatever the outcome of the case and whatever stage has been reached. The result is immaterial. On transfer of the case the former solicitor is entitled to be paid in full, and thus no problem arises with the indemnity principle. Indeed all solicitors are familiar with this scenario and with the concept of the solicitor receiving the case undertaking to preserve the original firm’s lien for costs, which are then recovered by the new solicitor from the other side if the case is won and paid to the former solicitor, with the client always remaining liable for those costs.

 

As we have seen, that is not the case in relation to a Conditional Fee Agreement.

 

The potential outcome is this:-

 

  • the original firm has not created a liability to be paid as the case has not been won and the doctrine of quantum meruit does not apply;

 

  • the new firm has no right to pre-transfer costs and thus is only entitled to costs from the date of instruction by the client and hence the need for a new Conditional Fee Agreement;

 

 


 

Backdating and Retrospective Conditional Fee Agreements and Rectification

 

A backdated Conditional Fee Agreement is just that, for example an agreement entered into on, say, 1 August 2013 but dated 31 March 2013. A retrospective Conditional Fee Agreement is one entered into on, say, 1 August 2013 and dated 1 August 2013 but expressed to cover work for a period prior to that date, say 31 March 2013. The effect may appear to be the same, namely that all work from 31 March 2013 is covered, but the courts have not always treated them the same way, and there is a clear judicial preference for retrospective, rather than backdated, Conditional Fee Agreements.

 

In Motto v Trafigura Ltd [2011] EWCA Civ 1150, the Court of Appeal held that the costs of vetting cases were only recoverable if covered by the Conditional Fee Agreement as otherwise there was no retainer, but the Conditional Fee Agreement could be drafted in such a way as to encompass the period when the vetting work was done, even if that was prior to the date of the Conditional Fee Agreement. At paragraph 61 of the judgment the court said:

 

“Equally, although of course solicitors and their clients can agree terms otherwise (as in the case of conditional fee agreements 3, 5, 6 and 7) the natural presumption in a contract by which a person engages a solicitor to act for him must be, in the absence of such a term, that he is agreeing to pay for work done in the future, not for work already done.”

 

Thus it is not even necessary to backdate the Conditional Fee Agreement; all that is needed is for a Conditional Fee Agreement entered in to at any time to recite that it covers work already done. Here the court appears not to have considered the old legal maxim that ‘past consideration is no consideration’ but that problem can be avoided by the conditional fee agreement being a deed under seal, in which case no consideration is required.

 

#FootnoteB

 

#FootnoteE

Retrospective conditional fee agreements

 

In Forde v Birmingham City Council [2009] EWHC 12 (QB), the Queen’s Bench Division of the High Court held that retrospective Conditional Fee Agreements are permissible and that no consideration is required. Any changes to the basis of the retainer must be made prior to the entitlement to costs becoming crystallized. The terms of the backdating must be such that a reasonable client would not object, the point being that the actual client is unlikely to object because she will not be paying anything.

 

If the second Conditional Fee Agreement failed then the first one could be resorted to. The court also held that s 58(1) of the Courts and Legal Services Act 1990 (CLSA 1990) and the changes made thereto meant that even a seriously flawed conditional fee agreement is not illegal, but merely unenforceable (See paragraph 206 of the judgment).

#FootnoteB

#FootnoteE

 

In Ahmed v The Bread Roll Co Ltd [2009] EWHC 90141 (Costs), the Senior Courts Costs Office held that although a backdated Conditional Fee Agreement was valid it was best to date it correctly, that is as at the date of signing and make it retrospective so as to avoid any suspicion of misleading anyone. An appeal against this decision was settled on terms not disclosed to the court.

#FootnoteB

#FootnoteE

 

In King v Telegraph Group Ltd [2005] EWHC 90015 (Costs) Senior Costs Judge Master Hurst held that a conditional fee agreement could be retrospective and said that “there seems no doubt therefore that the claimant is entitled to recover base costs from the date when he instructed his solicitors until the signing of the conditional fee agreement.”

 

However he added:

 

‘“Although there is no prohibition in the legislation against backdating a success fee, such backdating seems to me to fly in the face of the CFA Regulations and the CPR”, pointing out that the solicitors do not assume any risk under the CFA until it is signed and that they are under no duty to serve Notice of Funding until it is signed.

 

“It seems to me therefore to be quite wrong, and contrary to public policy, to permit the claimant’s solicitors to recover a success fee prior to the signing of the CFA.”’

 

In Holmes v Alfred McAlpine Homes (Yorkshire) Ltd [2006] EWHC 110 (QB), the Queen’s Bench Division of the High Court held that where solicitors had failed to explain to a client that a conditional fee agreement had been backdated, the agreement was still enforceable as there had been no material effect on the protection afforded to the client nor on the administration of justice.

 

The client had understood that the agreement did not apply to work undertaken before it was signed, and there had been no allegation of impropriety on the solicitor’s part.

#FootnoteB

#FootnoteE

 

In The Commissioners for Her Majesty’s Revenue and Customs v Blue Sphere Global Limited [2011] EWHC 90217, the High Court upheld the principle of retrospective conditional fee agreements, and success fees, and followed the case of Forde v Birmingham City Council [2009] EWHC 12 (QB) allowing the recovery of the success fee for the retrospective period.

 

This was a VAT tribunal case where there was no formal requirement to serve a Notice of Funding on Form N251. The court also held that the lack of notice made no difference as the paying party would have conducted the proceedings in exactly the same way even if it had had notice.

 

In J M Dairies Limited v Johal Dairies Limited and another [2011] EWHC 90211 (Costs), Master Gordon-Saker accepted that retrospective conditional fee agreements were not contrary to public policy and were lawful, but held that on the facts it would be unreasonable to require the defendants to pay the large retrospective success fee, including £60,000 for work done before the conditional fee agreement had been entered into, in the absence of notice of the conditional fee agreement during that retrospective period.

 

He observed that there was significant judicial reluctance to allow recovery of retrospective success fees for the retrospective period, but allowed base costs for the retrospective period and both base costs and success fees thereafter.

 

It is clear that some commentators have misunderstood the rationale of Motto v Trafigura Ltd [2011] EWCA Civ 1150, where the Court of Appeal’s comments were not addressed to the lawfulness of retrospective success fees, but rather the separate issue of whether funding investigation costs are recoverable. There the Court of Appeal was not referred to Forde, and it is widely accepted that its statement that “Until the conditional fee agreement is signed, the potential claimant is not merely not a claimant: he is not a client” is very obviously wrong.

 

So retrospective conditional fee agreements are lawful but recovery of success fees in the retrospective period will depend upon the facts of each case, including whether there has been compliance with the CPR and the effect on the paying party of the retrospection, the point being that, generally, by definition, the Form N251 will also be retrospective.

 

It remains to be seen whether the courts will adopt the same attitude in relation to conditional fee agreements entered in to on or after 1 April 2013 when any success fee will be recoverable only from one’s own client, that is the person actually entering in to the Conditional Fee Agreement whether it be backdated, retrospective or rectified.

#FootnoteB

#FootnoteE

 

In Hawksford Trustees Jersey Ltd v Stella Global UK Ltd and another [2012] EWCA Civ 987, CA, the main issue concerned a claimant who had been unable to obtain ATE cover prior to the original trial. He was successful at trial and the defendant appealed. At this stage the claimant managed to obtain ATE cover that not only provided cover in relation to the costs of the appeal, but would also provide cover in relation to the costs of the original proceedings if the appeal succeeded. The court was concerned with the issue of whether that element of premium attributable to providing cover for the original proceedings was recoverable as costs of the appeal and held that it was not.

 

Of rather wider significance was part of the reasoning why the majority of the court concluded that it would be wrong to allow for such recovery. The importance of giving notice of funding to an opponent was highlighted. In the judgment of Lord Justice Rix:

 

“… the importance of fair notice being given to the other party of a potential liability in additional costs is entirely undermined if the premium which the respondent seeks to recover in the appeal, so far as it relates to costs of trial, could be recoverable. For the defendant would have incurred all the costs of trial together with its potential (but retrospective) liability for the respondent’s ATE premium in ignorance, necessarily so, of what was coming round the corner when it appealed. When, however, in the course of its appeal, it learns for the first time of the ATE premium taken out in the appeal embracing cover for the costs of trial, it is too late for the defendant to do anything. It cannot concede the claim – it has already fought the trial. And if it concedes the appeal, then, if the respondent is correct in its interpretation of section 29, it will have to pay the ATE premium for the costs of trial. This is despite the fact that, in obtaining an appeal, it has persuaded the trial judge or the Court of Appeal that permission to appeal should appropriately be granted to it (while there is no similar hurdle in the standard case of a domestic claim form). In my judgment, such a situation is both unfair and antithetical to the purposes of the section. Moreover, although the matter was not debated before us, it is not clear to me that such unfairness can be dealt with as a matter of the question which arises before the costs judge of “whether the cost of insurance cover is reasonable” as a matter of quantum: see CPR 44 PD 11.10. The present issue is rather a matter of principle and jurisdiction.”

 

It appears that exactly the same reasoning could be used to decline to allow recovery of a retrospective success fee.

#FootnoteB

#FootnoteE

 

By virtue of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, recoverability of the success fee in a conditional fee case has been abolished in relation to conditional fee agreements entered in to on or after 1 April 2013. Thus the precise date of the agreement will determine who pays the success fee.

 

Clearly an agreement dated post 1 April 2013 but retrospective will not avoid the provisions of the Act and the courts have found against rectification – see Oyston v Royal Bank of Scotland [2006] EWHC 90053 (Costs) below. However, it is arguable that an agreement actually entered in to on or after 1 April 2013 but backdated is not caught by the Act as although the courts clearly prefer retrospective conditional fee agreements they have not gone as far as actually to prohibit backdated conditional fee agreements.

 

In Forde v Birmingham City Council [2009] EWHC 12 (QB) the High Court held the second of two conditional fee agreements to be valid and enforceable, even though it was retrospective and the retrospective period covered a period prior to 1 November 2005, when there was a very different, much stricter, regime in place. Consequently conditional fee agreements which were defective under the pre-1 November 2005 regime could be ‘cured’ by entering in to a new, but retrospective, conditional fee agreement.

 

The same logic could be applied in relation to conditional fee agreements entered into post 1 April 2013, but backdated to bring them within the pre-Legal Aid, Sentencing and Punishment of Offenders Act 2012 regime.

 

However, in such circumstances a court would almost certainly exercise its discretion to disallow recoverability both because the notice to the paying party will have retrospective effect, although not backdated, and also so as to give effect to the clear will of Parliament; as we have seen even where a backdated conditional fee agreement is valid the courts have been very reluctant to allow recoverability from the period prior to the actual date of signing.

#FootnoteB

#FootnoteE

 

 

Unlawful agreement – attempt to rectify by severance

 

In Oyston v Royal Bank of Scotland [2006] EWHC 90053 (Costs), the claimant had entered into a conditional fee agreement with his solicitors that provided for a 100% success fee and payment of a bonus in the event that damages in excess of a certain amount were recovered.

 

This was clearly an illegal agreement and the parties subsequently entered into a deed of variation that removed the reference to the bonus payment but the defendant argued that the conditional fee agreement was invalid as it was in breach of s 58(4) of the Courts and Legal Services Act 1990.

 

The claimant argued that the original agreement had been rectified by a consensual deed of variation and that it was possible to vary the agreement retrospectively, and that the departure from the statutory requirement had not had a materially adverse effect on the protection afforded to the client as the condition for triggering the bonus fee had not been met and that the use of severance was possible as the amount of the bonus element would not change the contract.

 

The court held that the Conditional Fee Agreement was in clear breach of s 58(4) and that the deed of variation was ineffective to rectify the situation as against the paying party. It had only been entered into when it was realised that the original agreement had a potentially fatal defect and it could not be right that a deed of variation could be used to impose a greater burden on the paying party than existed before judgment (see Kellar v Williams [2004] UKPC 30).

 

The fact that the claimant agreed to the variation was irrelevant. A breach of s 58(4)(b) and (c) would inevitably have a materially adverse effect upon the administration of justice and therefore the claimant’s argument on materiality failed (see Jones v Caradon Catric Ltd [2005] EWCA Civ 1821).

 

Severance was not available as it would be contrary to public policy to permit it; otherwise all defective agreement could be put right late in the day, even after the paying party had pointed out the alleged defects. That would not accord with either the statutory framework approach to public policy.

 

The conditional fee agreement was unlawful and unenforceable (see Spencer v London Wood (2004) Times, 30 March and Awwad v Geraghty & Co [2001] QB 570).

 

It seems from the case law set out above that had the parties entered in to a new, retrospective, conditional fee agreement it would have been valid and enforceable, albeit that the success fee may not have been recoverable from the paying party.

 

 

Pre-Assignment Base Costs

 

If there has been no valid assignment and the new firm has to rely on a new conditional fee agreement one of the key issues is whether it is all or nothing, that is whether in a non-assignable conditional fee agreement nothing is recoverable, either the success fee or the pre-transfer base costs.

 

Could the courts logically allow pre-transfer base costs but no success fee, bearing in mind that courts do not like windfalls, here the windfall to the losing tortfeasor being off the hook for pre-transfer base costs as well as the success fee?

 

If the new post-transfer conditional fee agreement is retrospective to the date of the original agreement then the answer may be that the court could so find.  Retrospection in contracts has always been allowed and was specifically sanctioned in conditional fee cases by the Court of Appeal in Forde v Birmingham City Council [2009] EWHC 12 (QB) which case also sanctioned concurrent CFAs.  This allows firms to seek to rely on the original, assigned, agreement but in default to rely on the new retrospective agreement.

 

If the new agreement needs to be relied upon, then it is very unlikely that the recoverability of the success fee will be allowed.  Even assuming – which is highly doubtful – that a CFA retrospective to pre-1 April 2013 could lawfully provide for a success fee, the courts have always been unwilling to allow recoverability prior to notice being given on Form N251.

 

This is because the idea of such notice being served was that the potential paying party might change its behaviour, for example by increasing an offer to settle.  A party that is unaware of a potential additional liability cannot do that and obviously notice, as a matter of logic, cannot be given retrospectively.

 

However the disallowance of a recoverable success fee does not prevent a court from allowing recoverability of normal between the parties costs on a standard basis from the date that the CFA is stated to begin.

 

Thus in a post-31 March 2013 CFA there is nothing inherently wrong in a court allowing ordinary costs back to the beginning of the case but disallowing any success fee.

 

Where there has been a change in the nature of the client, rather than a change in the status of the firm, this presents no difficulty, although as discussed above it is in those cases that the court is most likely to find a solution which allows recovery of the base costs and the success fee.

 

If the firm has changed then can the new firm have a retrospective CFA that picks up a previous firm’s costs?  By agreement with the client there is no reason why not.  Note that past consideration is no consideration and no consideration equals no contract unless the contract is a deed under seal.  It is arguable that a retrospective agreement does not involve past consideration; that is the whole point of retrospectivity, but it is best not to take any chances, so make the retrospective CFA a deed under seal.

 

A new firm taking over an issued matter maybe one of the few instances warranting a Damages-Based Agreement as this allows the new firm to charge a flat 25% of damages to the client however little work the new firm does.  A client may see it differently and prefer to pay by the hour in such circumstances.

 

That raises the issue of recoverability.  There is no requirement to claim costs from the other side on the old basis of hours X appropriate level of fee-earner.  In principle there is no reason why the costs claimed should not be a straight 25%, irrespective of the work done, which would fully protect the client.  How a court assessing such a costs claim will react is as yet unknown.  It is true that a DBA is a mixture of a fee for work done and a fee for taking the risk.  In a CFA those matters are, and have always been, separated out with the base costs being the fee for work done and the success fee being the risk fee.  Consequently it could be argued that recoverability of the full DBA would amount to the recovery of a success fee but the CPR make the indemnity rule apply in full to DBAs, suggesting that that is what is intended.

 

 

Qualified One Way Costs Shifting

 

Qualified One Way Costs Shifting is dealt with very shortly in the Civil Procedure (Amendment) Rules 2013 at new CPR 44.13 to 44.17.

 

 

Exceptions

 

Pre-action disclosure applications are not protected by QOCS, nor are proceedings where a claimant has entered into a pre-commencement funding arrangement before 1 April 2013.

 

Put simply if, prior to 1 April 2013, there is in place a conditional fee agreement or collective conditional fee agreement or ATE or membership organisation indemnity, then QOCS protection will not apply.

 

I can understand why, if ATE insurance or membership organisation protection is in place, QOCS should not apply as it would be unfair for a defendant to pay the recoverable ATE premium to a clamant who, on the face of it, is at no risk of paying costs.

 

However the success fee is to reward the lawyer for taking the chance of getting no fee because the case is lost. What on earth has that got to do with the risk of the defendant’s costs being payable?

 

This thinking is as woolly as a mammoth.

 

A pre-commencement funding arrangement is a creature “as defined in rule 48.2” (new CPR44.17). So, naturally, one looks at new CPR48.2, where at CPR 48.2(1)(a)(i) one will find the following:

“48.2(1) A pre-commencement funding arrangement is-

………..

  • a funding arrangement as defined by rule 43.2(1)(k)(i) where……”

 

CPR 43.2(1)(k)(i) defines a funding arrangement as “an arrangement where a person has –

  • entered into a conditional fee agreement or a collective conditional fee agreement which provides for a success fee…..”

 

A first day trainee can do better than that.

 

So QOCS applies to all personal injury proceedings where there is no pre-1 April 2013 recoverable success fee or ATE or membership organisation premium in place.

 

 

Retrospection of QOCS 

 

Thus it is fully retrospective in all other cases, covering cases that have been going on for years, which may come as a shock to insurers. This has recently been confirmed by the Court of Appeal in Wagenaar v Weekend Travel Ltd t/a Ski Weekend and Serradj (Third Party) [2014] EWCA Civ 1105, 31 July 2014.

 

The transitional provision is new CPR 44.17.

 

“44.17 This Section does not apply to proceedings where the claimant has entered into a pre-commencement funding arrangement (as defined in rule 48.2)”.

 

See above for my analysis of this definition, but, as a pre-commencement funding arrangement can, under new CPR 48.2 ONLY be pre-1 April 2013, it follows that any other pre-1 April 2013 arrangement is covered by QOCS.

 

On the face of it a claimant without a CFA or ATE with, say, a £200,000 costs order against them prior to 1st April 2013 does not now have to pay. A costs order where the defendant won on liability is worthless. Where the defendant won on a Part 36 offer, then generally the order is only as good as the level of damages recovered by the claimant.

 

This also highlights one of the odd aspects of the Court of Appeal’s decision in Simmons v Castle (No 2) [2012] EWCA Civ 1288 re the 10% general damages uplift to all claimants who prior to 1 April 2013 did not have a Conditional Fee Agreement with recoverable success fee in place.

 

Such a claimant, for example funded by a before-the-event insurance (BTE) policy, will get 10% extra general damages to compensate them for the non recovery of a non-existent success fee AND will benefit from QOCS to avoid them having to buy adverse costs insurance which in fact they already have through their BTE policy.

 

Furthermore a defendant gets no Part 36 costs protection until a costs order is made, so late acceptance of a defendant’s Part 36 offer does not trigger costs, whereas it did prior to 1 April 2013. So acceptance post  1 April 2013, out of time and the last one, two, three years’ costs liability goes, unless you have a CFA with recoverable success fee or you have recoverable ATE.

 

However I suspect that the defendant will refuse to pay costs unless a set-off for post-Part 36 costs is made, forcing the claimant to go to detailed assessment, except that if the bill is for £75,000 or less it will be a paper-only provisional assessment in the first instance. I hope that no-one in the Court of Appeal is planning any holiday any time soon.

 

 

Retrospective retrospection

 

Are you free to tear up any agreement providing for the recoverability of an additional liability and thus gain QOCS protection?

 

The relevant rule is CPR 44.17 which reads:

 

“This Section does not apply to proceedings where the claimant has entered into a pre-commencement funding arrangement (as defined in rule 48.2).”
New CPR 48.2 is long and complicated but CPR 48.2(1)(a)(i)(aa) – I have not made that up – defines a funding arrangement as itself defined by CPR 43.2(1)(k)(i) – I have not made that up either – as where  “the agreement was entered into before 1 April 2013 specifically for the purposes of the provision to the person by whom the success fee is payable of advocacy or litigation services in relation to the matter that is the subject of the proceedings in which the costs order is to be made;
or
……..”

 

This deals with CFAs, (bb) deals with CCFAs, 48.2(1)(ii) deals with ATE and 48.2(1)(iii) with membership organisation self-insurance.

 

Any one of these disapplies QOCS. By ending any relevant agreement can you disapply the disapplication and retrospectively achieve retrospective QOCS protection?

 

Thus it depends upon the meaning of “has entered into”. Clearly the better wording would have been “had entered into” or “has ever entered into” which would have put it beyond doubt. “Has” is not tense specific. “Has my client got a CFA ?” is present tense.

 

It is clearly arguable either way, but equally clearly the intention of Parliament was to disapply QOCS where recoverability of an additional liability was in place, so on the basis that courts should adopt a purposive construction of legislation, my view is that anyone who has ever had a recoverable liability does not get QOCS protection.

 

Don’t get me started on CPR 48.2(1)(a)(i)(aa) and its reference to the claimant paying the success fee in a pre-1 April 2013 when the whole point of it all is the abolition of recoverability – the client was not allowed to pay the success fee!

 

Thus my view is that an unassignable pre 1April 2013 CFA which provided for a success fee is a bar to QOCS, even though the success fee is not recoverable.

 

That has been reinforced by the decision of Master Haworth in Landau v The Big Bus Company, 31 October 2014, Master Haworth, SCCO.

 

 

After-the-Event Insurance

 

Care needs to be taken in relation to after-the-event insurance, where the position is slightly different. The policy is between the client and the after-the-event insurance company and therefore there is nothing to stop the policy continuing and, in the case of a pre 1 April 2013 premium, remaining recoverable from the other side.

 

However many after-the-event insurance policies provide that the policy ends if the client moves firms.

 

If the after-the-event policy is cancelled then clearly the premium will not be payable by anyone and this is not recoverable, whatever the outcome of the case; the after-the-event insurer is off risk but has also lost any chance of getting a premium and typically such premiums are not paid by anyone until the end of the case and in the event of defeat are not paid at all.

 

If the policy is not cancelled, then there should be no problem. If it is then there are a variety of options:-

 

  1. to continue without after-the-event insurance in place;

 

  1. for the new firm to self-insure, that is to accept liability for any adverse costs Order; this is perfectly lawful – see Sibthorpe and Morris v Southwark London Borough Council (Law Society intervening) [2011] EWCA Civ 25;

 

  1. for the new firm to fund the unrecoverable after-the-event insurance premium; the lawfulness of this has been confirmed by the Court of Appeal in Flatman and Germany v Weddall and Barchester Health Care Limited [2013] EWCA Civ 278;

 

  1. for the client to pay the premium himself; generally such a premium is a so-called “silver bullet” one which is payable only in victory, and therefore the client would not physically have to pay anything out unless and until the case is won; payment can then be taken by deduction from damages;

 

  1. for the solicitor to self-insure or arrange the insurance and pay for it out of an overall charge to the client, typically 25% of damages in a post-31 March 2013 Conditional Fee Agreement, although it is perfectly permissible to charge more, say 30%, to reflect the extra service of providing an indemnity against adverse costs.

 

In any situation where the client pays, directly or indirectly, for the after-the-event insurance premium he or she is likely to have a valid complaint that this expense has been forced upon him or her by the conduct of both the outgoing firm and the incoming firm.

 

In my view, in the absence of the after-the-event insurer allowing the policy to continue with the new firm, the firms should arrange between them for the insurance to be obtained, or an indemnity given, at no cost to the client.

 

Clearly the most satisfactory outcome is for the After-the-Event insurance provider to agree to allow the policy to continue with the new or merged firm and the After-the-Event insurer in each case should be approached and be asked to agree.

 

Clearly the benefit to the After-the-Event insurer is that they stand to recover a premium in a case which they had previously agreed to insure and where the risk profile should not have changed.

 

Note that in clinical negligence cases an element of the after-the-event insurance premium remains recoverable even if the insurance is taken out after 31 March 2013.

 

By virtue of a new Section 58C(2) to (4) of the Courts and Legal Services Act 1990 the Lord Chancellor is empowered to make Regulations allowing recovery of just that element of an after-the-event insurance premium relating to the costs of a claimant’s own risk of having to pay for one or more expert’s reports.

 

The Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No 2) Regulations 2013, effective 1 April 2013, provide that recovery of the ATE premium is only allowed if

 

  • the financial value of the claim for damages in respect of clinical negligence is more than £1,000; and

 

  • the risk insured is of incurring liability to pay for an expert relating to liability or causation, and

 

  • recoverability is limited to that part of the premium relating to the “risk of incurring liability to pay for an expert or reports relating to liability or causation in respect of clinical negligence in connection with the proceedings.”

 

See also my blog Clinical Negligence and ATE Recoverability.

 

 

READERS’ COMMENTS:-

 

John Hall’s comment on 8 October 2015:-

 

Hi Kerry

How, if at all, will this decision affect Deeds of Adoption where a pre April 2013 CFA is adopted by Executors or Administrators of the claimant’s estate?

 

Kerry Underwood’s reply:-

 

Depends on wording of CFA- Law Society one ends on death so cannot be adopted or assigned, but with appropriate wording generally no problem when it is the status of the client, rather than the law firm which changes, eg death, achieving majority, losing capacity etc.

 

Kerry

 

John Hall’s reply:-

 

Thanks Kerry. That is a relief!

 

Ed Wegorzewski’s comment on 8 October 2015:-

 

Kerry the benefit of the original solicitors’ retainer needs to be assigned, otherwise the second solicitor can’t claim the first solicitor’s costs. But we are there talking about the historical retainer. So if the new solicitor did nothing else, he could now seek payment of the first solicitor’s costs. Going forward, there clearly needs to be a new retainer. The purported assignment of the CFA, which was held to in fact be a novation because the first CFA itself couldn’t be assigned, was it; the client was held to have entered into a new CFA on the same terms as the first CFA. The problem was, due to changes in requirements, the “new CFA” was not enforceable. The judgment did not say that the new solicitors had no retainer, but that for non-compliance, it was unenforceable. No representations re disbursements seem to have been heard.

 

Kerry Underwood’s reply:-

 

Ed

 

On what basis can first solicitor’s costs be claimed if no assignment? There is no quantum meruit in CFA cases- see Forde v Birmingham Council. The job has not been done. The case has not been won. Would the lay client be liable for the first solicitor’s costs? Very clearly not, so indemnity principle applies.

 

In my view should be assignable, but if CFA is not assignable, as found here, then I do not see what retainer there is to assign. You make the point yourself- new CFA defective, therefore no other retainer for new firm to rely on, so no costs.

 

Kerry

 

Jeff Zindani’s comment of 8 October 2015:-

 

The DJ accepted without any proper consideration or analysis that this was a personal contract which was akin to a footballer or artist and so inherently personal that the rules relating to assignment prohibited this when in reality the client did not know the partner who signed the CFA or had much to do with the fee earner. Obviously, in complex cases or where the client has instructed an individual lawyer then it may be different but not here.

As Prof Bridge pointed out a few years ago “The law should be slow to conclude that particular categories of contract invariably give rise to non-assignable rights.” but clearly not in the Liverpool County Court!

 

Kerry Underwood’s reply:-

 

I don’t disagree with that. In any event what is the modern justification for the common law rule against assignment anyway?

 

Kerry

 

Mac McCaskill’s comment on 13 October 2015:-

 

Interesting article.

I refer my learned friend to the comments made by Mr Bumble, the Beadle.

 

Kerry Underwood’s reply:-

 

😄

 

Costs curious’ comment on 13 October 2015:-

 

Kerry, if there are no pre-April 2013 CFAs (and therefore recoverable success fees) to worry about, what is to stop the new firm that has “bought” the client base from a firm that is going into Administration from entering into a new CFA with the Claimant that is retrospective and covers all of the work done by the original solicitor if the original solicitor terminates their CFA and waives their right to claim the costs from the Claimant? New firm get all of the costs and the Claimant is no worse off as their success fee will be capped at 25% of their claim for damages. Admittedly, the new firm might have to implement a lower success fee (i.e less than 100% based on the risk of the case (as they might have admissions of liability)

 

Kerry Underwood’s reply:-

 

Yes, I think that that is theoretically possible and indeed one may choose not to charge the client a success fee, so the client is no worse off than if nothing had ever happened to the first firm. Retrospectivity is allowed. However: IBC v Bailey etc: can Firm B claim costs ON ITS OWN BEHALF for work it never did?

 

I do not think so.

 

Kerry

 

Mark Ellis’ comment on 14 October 2015:-

 

I have a situation where the client has entered into a pre April 2013 CFA with solicitors which provides for success fee but also has the benefit of after the event insurance cover for adverse costs, should the claim be unsuccessful.

 

Due to the client moving he instructed us, a more local firm (under a new CFA) post April 2013 for which we are unable to recover success fee or any insurance premium.

 

How do we protect the former solicitors costs, success fee and insurance premium going forward now that proceedings are to be served?

Do we have to serve two separate Notices of Funding?

The ATE Insurance have indicated that they are willing to continue to provide cover for adverse costs going forward.

Your views would be much appreciated

 

Kerry Underwood’s reply:-

 

Why cannot you recover the insurance premium? I is incurred by the client anti is irrelevant which firm was acting at the time; it is no different form, say, a court fee.

 

Unless you have an agency agreement with the former solicitors it is unlikely that any success fee can be recovered, or indeed any of the previous firm’s costs, but see the Spire Healthcare case, which in my view is wrong on this, but is useful for you.

 

Remember also that as proceedings have not been issued you should get QOCS if the ATE does not continue- see the Llandaff case and my blog on it.

 

You do not need to serve Notice of Funding as such but you should serve notice of fact that client continues to be covered by ATE even though change of solicitor. This should be done for the sake of transparency and also tactically, so that the other side know that your client is protected.

 

Note that, depending on the terms of the original CFA, and the precise terms of it ending, your client may be liable for the first solicitor’s costs and be unable to recover them.

 

Kerry

 

Ian Valentine’s comment on 30 November 2015:-

 

What if SGI Legal varied the Barnetts CFA by claiming a 0% success fee? Would SGI still be required to impose the damages-based cap at 25% even though they are effectively waiving their success fee?

 

Kerry Underwood’s reply:-

 

A clear statement that the success fee will be capped at 0% of damages complies with the law. It is a MAXIMUM of 25% – it is not FIXED at 25%.

 

Kerry

 

Alex Brown’s comment on 30 June 2014:-

 

Very good blog covering numerous angles. For what it is worth, I understand the ruling in Blankley is due to be heard in the Court of Appeal in November. Very important pre and post Jackson guidance on frustration as Defendants seek to strike out large chunks of bills, especially where capacity is in dispute.

 

Kerry Underwood’s reply:-

 

Many thanks.

 

Sue’s comment on 14 August 2014:-

 

Hi Kerry – could I just be clear on this point. Client with a pre 1.4.13 CFA which provides for the recovery of a success fee moves with his trusted solicitor to a new firm and the CFA is assigned to that new firm post 1.4.13. Whilst it is almost certain that that assignment could not be challenged (and for the purposes of the indemnity principle the CFA continues to provide a valid retainer for the recovery of inter parte base costs), recovery of any success fee on work done post 1.4.13 from the opposition (in the event of a win of course) would not be possible because of the change in the law? The client would have to be advised that, in choosing to stay with the individual solicitor at the new firm, is likely to cost him? The way round this would be for the new firm to deal with the matter on an agency basis possibly? Or is there no correct way to preserve the recoverability of the success fee from the paying party? Many thanks,

 

Kerry Underwood’s reply:-

 

The law of assignment is of great complexity and is often difficult to apply to any given situation.

 

I disagree with your statement “whilst it is almost certain that that assignment could not be challenged…”

 

It is true that in the case of Jenkins v Young Brothers Transport Ltd [2006] EWHC 151 [QB] the High Court upheld the validity of an assignment from one firm to another, and indeed to a third firm, where the solicitor had moved firms. That is all dealt with in my blog under the heading Scenario One.

 

That is a High Court decision and as such is binding on courts below, but many of us think that that decision was wrongly decided, albeit a fair decision in the circumstances.

 

It is important to remember that under the old regime the Claimant solicitor would have lost all costs if there was no valid Conditional Fee Agreement in place.

 

Either the Conditional Fee Agreement is validly assigned, or it is not. If it is validly assigned then the original agreement continues in place and if that is a pre-1 April 2013 Conditional Fee Agreement then both base costs and the success fee are recoverable from the losing party.

 

If the Conditional Fee Agreement is not validly assigned then there is no retainer in place and thus there could be no recovery of any costs and this is due to the indemnity principle.

 

A fresh Conditional Fee Agreement can be entered into on the basis that it only comes into play if the original one is held not to be validly assigned. The starting point with a fresh agreement is that no success fee would be recoverable, because it is post 31 March 2013, and that no base costs prior to the date of the new Conditional Fee Agreement could be recovered either.

 

Theoretically it is possible to make the Conditional Fee Agreement retrospective to the start of the case but my view is that there would still be no recoverability of the success fee as the Conditional Fee Agreement would be post 31 March 2013, even though made retrospective to a date before then.

 

If the agreement was with the same firm and there had simply been a problem with the earlier one then there is no problem. However there is obviously a problem in firm B having an agreement retrospective to a date when they were not acting for the client and when the client was represented by firm A. In other words even if the agreement is retrospective the new firm cannot claim for work that it never did.

 

The new firm is of course free to take the case on on the same basis as the original agreement, that is without charging the client a success fee. Note also that most Conditional Fee Agreements allow the original firm to charge the client in full if they move firms. The irony of that position is that although it is potentially harmful to the client the indemnity principle means that those costs would be recoverable from the other side in the event of ultimate victory.

 

Acting on an agency basis solves the problem.

 

All of this is dealt with in my blog which I suggest you read in full as it does deal with all of these points.

 

All of these comments must be read subject to the comments of the Supreme Court in the case of Coventry and Others v Lawrence and Another (2) [2014] UKSC46 where the Supreme Court suggested that recoverability is of itself a breach of a paying party’s right to a fair trial and Article 6 of the European Convention on Human Rights and potentially an unjustified deprivation of property contrary to Article 1 of the First Protocol to the Convention.

 

Put more simply there is now no guarantee that anyone will recover any additional liabilities from the losing party but this is subject to a final decision of the Supreme Court. All of this is dealt with in my blog – Recoverability May Be Illegal Rules Supreme Court.

 

Kerry

 

Paul Davis’ comment on 2 September 2014:-

 

Kerry. Do you happen to have a precedent for an assignment of a CFA that you would share?

 

Kerry Underwood’s reply:-

 

Yes, £750 plus VAT. Contact me on 01442 430900 or kerry.underwood@lawabroad.co.uk

 

Kerry

 

Simon’s comment on 31 October 2014:-

 

On a case where the client becomes bankrupt after the commencement of the claim, I understand he ceases to have sufficient interest to continue. If a Trustee in Bankruptcy refuses to have the CFA assigned to him, will we have to discontinue as the current CFA is of no value, and we cannot draw up a new CFA for the client.

 

Kerry Underwood’s reply:-

 

Please read my blog: Personal Injury: Acting for Bankrupts and my blog Assignment of Conditional Fee Agreements where this issue is dealt with in detail and your question answered.

 

Kerry

 

Simon’s comment on 1 November 2014:-

 

Hi Kerry, I had already read it. The claim is for PI & specials. The specials are medium, so we can’t dump them (£2 or £3K). I have asked the T in B to have the CFA assigned to him with reference to the provision of the IA you mentioned at the end of the blog and a threat of a potential for a claim against him for lost costs if he did not agree.

 

I was wondering what to do if he still refuses to have the CFA assigned to him.

 

In that circumstance do we either:

 

~ continue with the claim and proceed against the T in B for costs at the end; or

 

~ discontinue once he refuses the assignment and then proceed against the T in B for his failure to assign the CFA.

 

BTW, thanks for the fantastic talk at the Solicitors Group in Manchester last week.

 

Kerry Underwood’s reply:-

 

I note the position.

 

My view is that the whole case rests in the Trustee in Bankruptcy but that the Trustee in Bankruptcy then has effectively a reverse trust to account to the claimant for the general damages element of the claim.

 

In my view neither of the options that you propose is feasible.

 

If the claim vests in the Trustee in Bankruptcy, and if it includes special damages that is the case, then you cannot continue with the claim as you have no standing.

 

If the claim is discontinued then, generally that is that, and the claimant would be unable to proceed, and therefore that is not an option.

 

Assuming that the matter rests in the Trustee in Bankruptcy and he refuses to have the CFA assigned to him, then the potential loss to the client is in having to pay the success fee out of damages, whereas it would have been recoverable in a pre-1 April 2013 CFA. However if the Trustee in Bankruptcy agrees to waive that charge, that is to enter into an agreement with the Claimant whereby nothing is taken from the claimant’s damages, then the loser is the Trustee in Bankruptcy who is charging a lower fee than otherwise he would have charged.

 

Provided that those costs are generally not charged, and therefore do not come out of the estate, the client and the estate suffer no loss.

 

If in fact the Trustee in Bankruptcy does make such a charge then I believe your client would have an action against him in relation to any deduction from general damages, as of course those general damages still revert to the claimant, even though bankrupt.

 

In relation to any deduction made in relation to special damages then this would be a claim by the estate as that element of damages would go into the bankrupt’s estate, rather than to the bankrupt.

 

You risk losing all costs as there is clearly an argument that there is no valid retainer in place for pre-bankruptcy work as the pre-condition of a charge under the Conditional Fee Agreement, a win, has not been achieved and in that sense it is akin to the death of the claimant, when again no payment is due.

 

Your ability to charge your own client will depend upon the terms of the Conditional Fee Agreement, but I suspect that you have no right to charge the client.

 

That throws up a dilemma. The loss is effectively yours, but it is of course trite law that costs belong to the client and not to the solicitor. My feeling is that you would not have a freestanding action against the Trustee in Bankruptcy and any action would be at the suit of your client. However under the indemnity principle if your client has no obligation to pay you then the client, who I believe is the only person with a potential cause of action, in fact has no loss and thus has no claim.

 

I am unaware of any case law on this point.

 

This also throws up the issue of whether, in the absence of a recoverable additional liability, the Trustee in Bankruptcy acquires Qualified One-Way Costs Shifting for the client. I deal with all of this in my blog – Qualified One-Way Costs Shifting. My view is that Qualified One-Way Costs Shifting is not acquired in those circumstances.

In Landau v Big Bus Company and another [2014] EWCA Civ 1102 the Court of Appeal held that where there had been a recoverable additional liability, in that case in relation to the first instance proceedings, then even though there was no recoverable additional liability in the appeal proceedings, as there was a fresh CFA and ATE insurance, Qualified One-Way Cost Shifting did not apply in the Court of Appeal because there had been a recoverable additional liability in those proceedings.

 

Thus it must be the case that in the claim and proceedings, that is without the additional factor of a separate appeal, the existence at any time of a recoverable additional liability disqualifies the claim from QOCS. That is, as we used to say, a fortiori – that is if it cannot apply in an appeal then it is even more the case that it cannot apply in a continuation of the first instance proceedings.

 

Emma’s comment on 2 March 2015:-

 

I have just stumbled across your excellent blog whilst trying to find clarification on a tricky issue – I wonder if you might be able to help?

 

Client lacks capacity throughout the claim – can a pre-April 2013 CFA between litigation friend and solicitor be ‘adopted’ by a new litigation friend upon the death of the original litigation friend, or is a new post-LASPO CFA necessary?

 

Any guidance much appreciated!

 

Thanks

 

Kerry Underwood’s reply:-

 

Thank you for your response.

 

My view is that you do not need to have a fresh Conditional Fee Agreement. The true party has been the same throughout and the solicitors have been the same throughout and it is clearly a pre-April 2013 Conditional Fee Agreement. The litigation friend is just that and is not a party to the litigation. All that needs to happen is that the new litigation friend be formally advised of their responsibilities, with you giving the Solicitor’s Certificate for suitability etc. The litigation friend is just that – the friend in the litigation and that does not affect the underlining contractual relationship.

 

As a belt and braces policy I advise you to adopt the suggestion I have made above, but also to enter into a fresh Conditional Fee Agreement with the litigation friend but stated to be on the basis that it only comes into play if the original Conditional Fee Agreement is found, for any reason, to be no longer valid. The authority for more than one Conditional Fee Agreement being in place at any given time is Forde v Birmingham City Council [2009] 1WRL 2732.

 

In my view a court will work very hard to preserve the validity of the original Conditional Fee Agreement, and therefore recoverability of the success fee and indeed pre-death of litigation friend base costs as failure to do so would clearly discriminate against disabled people and is arguably unlawful and a breach of the Human Rights Act 1998.

 

In any event a contract between a patient lacking capacity and a solicitor is not void but is voidable and so even if the contract was between the claimant and the patient that would not be fatal to the agreement.

 

That was the rule laid down in Imperial Loan Company Ltd v Stone [1892] 1 QB 599.

 

The paying party has no standing to interfere with that legal position and has no power to argue that the claimant/patient should be required to void the contract.

 

It would be curious indeed if a contract between someone lacking capacity and made pre-April 2013 would be upheld but one were a litigation friend had been properly appointed, but then had died, would not be upheld.

 

In my view you should have no problems.

 

More detailed information is contained in my blog – Conditional Fee Agreements, Damages-Based Agreements and Contingency Fees.

 

In the very recent decision in Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2015] EWCA Civ 18 the Court of Appeal confirmed that the liability to pay a solicitor’s costs remains with the litigant, even a litigant without capacity, and not with the litigation friend. Thus if the client lacks capacity at the time of retainer, then that retainer is still with the litigant and the litigation friend is merely a statutory agent of the incapacitated litigant, and not a principal to the retainer.

 

This is essentially the same line of reasoning as the court adopted in Dunn v Mici [2008] EWHC 90115 (Costs) in relation to minors.

 

Please keep me updated.

 

Kerry

 

Emma’s reply:-

 

Hi Kerry – thank you for your response. The client lacks capacity under the MCA ’05 and has done throughout, although I cannot find any authority to say that a new CFA is not needed in the circumstances..

Emma

 

Richard Satyanadhan’s comment on 26 March 2015:-

 

I came across your brilliant, and very helpful, article whilst trying to find an answer to whether Jenkins would apply where a firm was transferring to an LLP (and it was not possible for both firms to run in tandem). Your article is helpful, but I was wondering whether there was anything that would assist (or whether you have anything that my firm could purchase!) to deal with the issue. It is only three or four of the old style agreements, and all clients would be more than happy to confirm that they are transferring to the solicitor, not the firm. Any assistance most gratefully received.

 

Kerry Underwood’s reply:-

 

Many thanks for your kind remarks!

 

All dealt with in correspondence now 🙂

 

Kerry

 

The General’s comment on 12 May 2015:-

 

Hi Kerry, what if C, as part and parcel of their BTE insurance, was entered onto a CCFA dated pre- 1.4.13.

 

Does the presence of the CCFA prevent a 10% uplift in general damages, or does the CCFA fall foul of s.44(6) LASPO 2012: “the agreement was entered into specifically for the purposes of the provision to P of advocacy or litigation services in connection with the matter that is the subject of the proceedings in which the costs order is made…”.

 

i.e. can a pre-accident CCFA ever be entered with the requisite specificity?!

 

Thanks as ever.

 

Kerry Underwood’s reply:-

 

You appear to be confusing the issues of recoverability of success fees and the 10% uplift in General Damages.

 

The Legal Aid, Sentencing and Punishment of Offenders Act 2012 does not deal with the 10% uplift in General Damages. Section 44 deals with the recoverability of success fees and nothing else. In relation to the recoverability of a success fee the test is whether the agreement was entered into specifically for the purposes of the provision to a person of advocacy or litigation services in connection with a matter that is the subject of the proceedings in which the costs order is made, or advocacy or litigation services were provided to that person under the agreement in connection with that matter before the commencement day.

 

Section 44(6)(a) deals with Conditional Fee Agreements and section 44(6)(b) deals with Collective Conditional Fee Agreements.

 

Thus the test is not whether the agreement was entered into prior to the commencement date of 1 April 2013 but rather whether advocacy or litigation services were provided to the actual person under that Collective Conditional Fee Agreement in connection with that matter before 1 April 2013.

 

This is to avoid the situation where a pre-1 April 2013 CCFA is used to justify the recoverability of the success fee even though the cause of action only arose after 31 March 2013.

 

A pre accident Collective Conditional Fee Agreement does not need to be specific; indeed an ordinary Conditional Fee Agreement does not need to be specific and nor should it – see my recent blog – CFAs: Never Name the Defendant!

 

The issue of the 10% uplift in General Damages was not dealt with by legislation but rather by the Court of Appeal in its two decision in Simmons v Castle [2012] EWCA Civ 1039.

 

True it is that those cases said that General Damages were increased by 10% unless the claimant had a Conditional Fee Agreement with a success fee and thus fell within section 44(6).

 

Thus the existence of BTE insurance is not relevant and indeed nor is the existence of ATE insurance. Neither of those make any difference to the 10% increase which is designed to deal with the non-recoverability of the success fee and nothing else and this is dealt with in paragraph 12 of the Court of Appeal’s revised Judgment. What you do not say is whether or not there was a recoverable success fee in the Collective Conditional Fee Agreement.

 

If there was then the 10% increase does not apply; if there was not then the 10% uplift does apply.

 

Kerry

 

Phil’s comment on 18 June 2015:-

 

Dear Kerry

 

Didnt quite know where on the blog to place this.I am really struggling.I have been instructed in a commercial case where liabilty is admitted.I want to put the client on a CFA but I dont have a precednt CFA for use in such cases.I have tried everywhere to find one.I dont know if you might have one that would assist me.I hate to ask but I am completely stuck.

 

Regards

 

Phil

 

Kerry Underwood’s reply:-

 

I sell a complete set of 49 precedent conditional fee agreements for £900 plus VAT, reduced to £750 plus VAT for those who have attended Underwood on Tour or Kerry on Tour. Contact me on 01442 430900 or Kerry.underwood@lawabroad.co.uk

 

Kerry

 

 

 

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Written by kerryunderwood

December 2, 2015 at 5:11 am

Posted in Uncategorized

15 Responses

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  1. […] Assignment of Conditional Fee Agreements: Unified  […]

  2. […] Kerry Underwood on Assignment of Conditional Fee Agreements Unified. […]

    • Capacity is a legal, not medical, decision and you do not need a litigation friend until proceedings are issued and a contract for legal services is a contract for necessaries, so there should be no problem, but why on earth was a 12.5% success fee agreed? If the CFA was deficient in that regard, it suggests it might be deficient in other regards, so be very careful.

      Kerry

      kerryunderwood

      December 11, 2015 at 5:03 pm

  3. This is all very useful Kerry, many thanks for a very comprehensive resource.

    I have, however, come across a situation which is not described here.

    There is a case where the claimant has entered into a pre-LASPO CFA with a 12.5 % success fee but medical evidence shows that he does not have capacity to manage the litigation process himself without a litigation friend due to his brain injury. He does however have capacity to deal with his own financial affairs.

    I therefore believe that the litigation friend will need to enter into a fresh post-LASPO CFA that is retrospective to the date of initial instruction by the claimant. This will ensure that there is a valid CFA that will allow recovery of all base costs in this matter (relying on Forde v Birmingham City Council [2009] 1WRL 2732 for the presence of two CFAs).

    If the claimant regains capacity by the end of the claim then it may be possible to rely on the original CFA if we argue the principles of Blankley v Central Manchester and recover the success fee. Do you think that there any other way to recover the SF in this matter?

    Any guidance much appreciated.

    Andrew Crisp

    December 11, 2015 at 4:43 pm

  4. found the unified piece very interesting – but wondered where I could find information on Scenario 6 – legal status of firm changes from partnership/ LLP to limited company and first entity ceases to trade

    Kevin bays

    March 11, 2016 at 8:38 am

    • I can advise on that- price depends on circumstances etc. – but guideline price including detailed advice and drafting of documents etc is £5,000 plus VAT giving a total of £6,000.

      You can contact me on 01442 430900 or kerry.underwood@lawabroad.co.uk

      Kerry

      kerryunderwood

      May 2, 2016 at 6:37 pm

  5. […] The problem is easily avoided by entering into an agency arrangement – see my blog Assignment of Conditional Fee Agreements: Unified. […]

  6. Thanks for pointing me to this which I had read before and have just read with interest the below,

    ‘As set out above the courts frequently referred to the trustee as being an assignee of the action, which lends support to the idea of the Conditional Fee Agreement being assignable…..If that is not an option, then the Trustee should be strongly advised to have the original CFA assigned to him or her.’

    Would not the CFA be automatically vested in Trustee along with the chose upon bankruptcy? Would it not then be for the Trustee (The Assignee) to assign the chose and such interest as s/he may have in the chose (including the parasitic CFA) back to the Bankrupt (The Assignee) ? I have done this once before with a Pre Jackson CFA and the validity was accepted (post Jackson) by a large Defendant firm.

    dominicmoss

    August 31, 2016 at 10:34 am

    • Dominic

      Thanks.

      Obviously the whole issue of whether a Conditional Fee Agreement can be validly assigned remains up in the air.

      I am not an expert on bankruptcy and in my blog dealing with bankruptcy I am really pointing to the pitfalls facing solicitors in relation to acting for bankrupts and much of the post is about avoiding acting for bankrupts by carrying out the necessary, free, search.

      However I do not think that the Conditional Fee Agreement automatically vests in the Trustee when a client becomes bankrupt. If that were the case then potentially the Trustee in Bankruptcy could be taking on a very onerous Conditional Fee Agreement at a very high hourly rate. Furthermore it may be a No Win Lower Fee Agreement rather than a No Win No Fee Agreement.

      The same could be said of an old-fashioned retainer. Supposing a solicitor had agreed with a client a rate of say £700.00 per hour and the client becomes bankrupt. Is it being suggested that the Trustee in Bankruptcy is then bound by that very high hourly rate? I think not.

      It is true that the Trustee in Bankruptcy can assign the chose in action back to the original party, but it has always been accepted that one can assign a chose in action. It is not universally accepted that one can assign a Conditional Fee Agreement.

      Kerry

      kerryunderwood

      September 12, 2016 at 10:58 am

  7. The other option would be to act for the Trustee when pursuing the claim (rather than have it assigned back to the ex Bankrupt Claimant) but I am unsure why the original CFA needs then to be assigned to the Trustee. Wont it be vested with him in any event ? I am grateful for any pointers you may have it is a very tricky matter to deal with. The client may not have the money to buy out the Trustees interest (it might be £20,000) and I am looking for other ways forward.

    dominicmoss

    August 31, 2016 at 12:36 pm

    • Dominic

      Please see my earlier response. If the Trustee in Bankruptcy instructed the same solicitors the trustee would be instructing them as trustee, rather than as the original claimant, and my view remains the same, that is that the Trustee in Bankruptcy is not bound by the original retainer between the original solicitor and client.

      Kerry

      kerryunderwood

      September 12, 2016 at 11:01 am

  8. Do you happen to have or could you point me to a precedent for assigning a CFA to the Trustee in Bankruptcy.

    dominicmoss

    September 1, 2016 at 4:03 pm

    • Dominic

      No, I am unaware of any precedent for assigning a Conditional Fee Agreement to the Trustee in Bankruptcy.

      Kerry

      kerryunderwood

      September 12, 2016 at 11:03 am

  9. Kerry,

    As for the service of the Notice of the Assignment can it be by ordinary post?

    I had thought it might need to be by recorded delivery pursuant to section 196 (4) LPA 1925?

    Regards

    Chris Kilroy

    Christopher Kilroy

    October 11, 2016 at 1:16 pm

    • Chris

      Section 136 is the relevant section and as far as I can see that only requires the notice to be in writing; it does not require service as such. Section 196(1) requires any notice required or authorised to be served or given by the Act to be in writing, so clearly any notice must be in writing. However my view is that section 196(4) does not apply, but I might be wrong. Note that if it does apply service is by registered letter, not recorded delivery. In any event section 136(4) seems not to require service in that way, but to provide that such service shall be deemed sufficient without further proof if not returned undelivered.

      Section 196(6) provides that the section does not apply to notices served in proceedings in the court; it is arguable whether notice of an assignment of a conditional fee agreement is a notice served in proceedings in the court.

      Interesting point.

      Kerry

      kerryunderwood

      October 11, 2016 at 6:47 pm


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