Kerry Underwood

ASSIGNMENT OF CONDITIONAL FEE AGREEMENTS

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In Warren v Hill Dickinson LLP [2018] EWHC B6 (Costs)

the Senior Courts Costs Master held that two conditional fee agreements had been validly assigned from the first law firm to the second law firm after the individual solicitor had moved firms and the fact that the previous firm had ceased practising did not affect the validity of the assignment.

Thus the case could not be distinguished from

Budana v The Leeds Teaching Hospital NHS Trust [2017] EWCA Civ 1980.

In Budana the solicitors were unable or unwilling to continue representing the client and, in this case, the first set of solicitors had ceased to practice.

In the Costs Master’s view, the effect was exactly the same.

Furthermore, as in Budana, if the decision of the first firm of solicitors to cease practising could be treated as a repudiatory breach of contract, then it was for the client to accept that breach and to treat each conditional fee agreement as terminated, but he did not do so.

The client wanted to remain bound by the terms of the original conditional fee agreements, and therefore to have them assigned, so that he would not be liable for the first firm’s legal costs to the date that he withdrew instructions from them and so that he would not have to sign up to new conditional fee agreements with the new solicitors, or pay them on an hourly rate basis, win or lose.

On a second point the Costs Master held that there had been a win under the terms of the conditional fee agreements as the client had obtained judgments in the two sets of proceedings. He rejected the client’s assertion that there had been an overarching agreement between him and the individual fee earner, who had acted for him for a long time, that, on each occasion that she acted, she would only recover fees in the event that the matter resulted in a net gain to him.

Here the defendants to the proceedings that were subject of the conditional fee agreements had been made bankrupt and therefore there was no recovery from them, and so no net gain for the clients.

The Master found no evidence of the claimant’s assertion that there had to be a net gain under the terms of the agreement.

Comment

A sensible and practical decision.

However, it is richly ironic that in circumstances where there is no gain at all for the client under the conditional fee agreement, the costs and success fee can be charged to that client, depending upon the definition of a “win”.

The irony is that the High Court recently in

Herbert v HH Law Limited [2018] EWHC 580 (QB)

slashed the success fee from 100% to 15% where the solicitor had made full recovery.

It seems that the better you do for a client, the less you are entitled to be paid according to the likes of Mr Justice Soole, the judge in the Herbert case.

Why is it that a client who freely enters into an arrangement where 25% of any damages will be taken by the solicitor can avoid that agreement, but a client who is deemed to have held that what is very obviously not a win in real terms, is nevertheless a win, cannot challenge that retainer?

It also raises the issue of whether a solicitor who agrees only to charge fees and a success fee in the event of recovery of damages, is entitled to a higher success fee as, very obviously the achieving of a win under that definition is significantly riskier.

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Written by kerryunderwood

April 16, 2018 at 9:19 am

Posted in Uncategorized

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