Alina Budana v The Leeds Teaching Hospitals NHS Trust The Law Society (Intervener)
| Jurisdiction | England & Wales |
| Judge | Lady Justice Gloster,Lord Justice Davis,Lord Justice Beatson |
| Judgment Date | 05 December 2017 |
| Neutral Citation | [2017] EWCA Civ 1980 |
| Docket Number | Case No: A2/2016/2717 |
| Court | Court of Appeal (Civil Division) |
| Date | 05 December 2017 |
[2017] EWCA Civ 1980
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COUNTY COURT
AT KINGSTON UPON HULL
District Judge Besford
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Gloster
Vice President of the Court of Appeal, Civil Division
Lord Justice Davis
and
Lord Justice Beatson
Case No: A2/2016/2717
and
Nicholas Bacon QC and Nico Leslie (instructed by Victory Legal Costs Solicitors) for the Appellant
Roger Mallalieu (instructed by Acumension Limited) for the Respondent
David Holland QC and Ms Galina Ward (instructed by Irwin Mitchell LLP) for the Intervener
Hearing date(s): 5 July 2017
Introduction
This appeal raises important issues as to how a solicitors' retainer under a Conditional Fee Agreement ("CFA") may be transferred from one firm to another, following changes to litigation funding resulting from the Legal Aid, Sentencing and Punishment of Offenders Act 2012 ("LASPO"). It comprises an appeal by Ms Alina Budana ("the claimant") against one part of the order of District Judge Besford ("the judge") dated 4 February 2016, and a cross-appeal by The Leeds Teaching Hospitals NHS Trust ("the defendant") against a different part of the same order.
The decision below has attracted widespread comment in the legal press. Because of its importance, by order of HHJ Robinson dated 22 June 2016, and this court having accepted jurisdiction, the appeal was transferred from the County Court to the Court of Appeal under the "leapfrog" procedure provided by what is now CPR 52.23. Subsequently, the Law Society was granted permission to intervene by Lewison LJ.
Factual background
On 6 November 2011, the claimant tripped and fell whilst attending the defendant's hospital. She was heavily pregnant at the time and suffered damage to her ligaments as a result of her fall. The cause of the accident was an area of defective pavement within the control of the defendant.
On 2 December 2011, the claimant instructed Baker Rees ("BR"), solicitors, to pursue a claim for damages on her behalf. On the same date she entered into a CFA with BR under which she among other things agreed to pay a 100% success fee in the event that she won her case (which subsequently she duly did). However, her obligation to pay such success fee was capped by reference to the amount she recovered from the defendants to the action. I will refer to this CFA as "the BR CFA". The BR CFA had attached to it Terms and Conditions which related exclusively to the fees chargeable for the work to be carried out by BR. Thereafter BR acted on behalf of the claimant. A letter of claim was sent on 1 February 2012, and liability was admitted on 17 May 2012.
However, during the course of their retainer, BR decided that personal injury litigation was no longer economically viable, as a result of the LASPO reforms. BR wrote to the claimant on 22 March 2013 explaining that, due to the reforms, they believed that only "the biggest personal injury firms will be able to continue to operate" and proposing to transfer her case to a larger and more specialist firm, Neil Hudgell Ltd ("NH"), unless the claimant instructed them otherwise. The letter included the following terms:
"In light of the impending reforms, we have decided to stop handling personal injury litigation. When making this decision we were concerned to make sure that our existing clients were properly protected. To this end, we have put in place a process to transfer your case to a firm of solicitors (Neil Hudgell) who are specialists in personal injury litigation and who intend to continue this type of work. ……
Neil Hudgell will continue to act for you on the same no win, no fee agreement that you had with us. Please note that to avoid any unnecessary delay and to protect your case, we will automatically transfer your file to Neil Hudgell Ltd on 25th March unless you instruct us otherwise."
The claimant did not instruct BR otherwise.
On 25 March 2013, BR and NH entered an agreement ("the Transfer Agreement") for the sale to, and purchase by, NH of BR's "book" of personal injury business. The sale was for value. The material provisions of the Transfer Agreement for present purposes were as follows:
i) "Business" was defined as:
"the business of a solicitor's practice carried on by the Seller as a sole practitioner at the Transfer Date and known as both Baker Rees and Baker Rees Injury Lawyers";
ii) "The Engagements" were defined as:
"the benefit (subject to the burden to the extent that the same remains unperformed as at the Transfer Date) of the engagements of the Seller which are the part of the Business which comprises the personal injury department caseload of the Seller and which at the Transfer Date remained to be performed in whole or in part and is listed in Schedule 1 (and including any associated AEI Policies and all files and papers relating to the Engagements…)";
the claimant's name was included in Schedule 1;
iii) "Engagement Goodwill" was defined as:
"at the Transfer Date that part of the Goodwill of the Business of the Seller that relates solely to the Engagements;"
iv) Clause 2 of the Transfer Agreement provided as follows:
" Sale and Assignment of the Engagements
2.1 The Seller agrees to sell with full title guarantee and the Buyer agrees to buy, relying on the Warranties, with effect from Completion the Engagements, the Engagement Goodwill, the Engagement Information and the Supplier Contracts.
The Seller agrees to assign to the Buyer all such right, title and interest that it has at the Transfer Date in or relating to the Engagements and in this regard shall on the execution and exchange of this Agreement deliver up to the Buyer a completed and executed Deed of Assignment in the form set out at Schedule 4 hereof."
v) Clause 7 of the Transfer agreement provided as follows:
" Position after Completion
7.1. Both parties to this Agreement agree that they do not consider the Buyer to be a successor practice (for the purposes of the Solicitors Indemnity Insurance Rules 2009 and 2010) and they will take all such steps and undertake all such actions reasonably necessary to avoid the Buyer being considered such a successor practice.
7.2. As from the Transfer Date the Buyer shall be entitled to all profits earned and all income and other sums receivable in respect of any period after the Transfer Date and to bear all losses and to pay all outgoings and be responsible for all liabilities incurred, in carrying on the Engagements.
7.3. Save in respect of any matter relating to a claim under professional indemnity insurance, nothing in this Agreement shall pass to the Buyer, or shall be construed as acceptance by the Buyer of, any liability, debt or other obligation of the Seller, (whether accrued, absolute, contingent, known or unknown) for anything done or omitted to be done before Completion in the course of or in connection with the Engagements or the Business and the Seller now:
7.3.1. indemnifies and hold the Buyer harmless against any and all obligations and liabilities arising therefrom; and
7.3.2. will perform any obligation falling due for performance or which should have been performed before Completion insofar as it is able to do so and the Buyer consents.
……
7.6. The Buyer covenants with and undertakes to the Seller that whilst any of the Engagements are still active the Buyer will diligently and professionally progress the same and so far as the Buyer is able so to…"
vi) Clause 14 provided as follows:
" Engagements
14.1. All Engagements which can be lawfully assigned by the Seller without the consent of any third party shall be assigned to the Buyer with effect from the Transfer Date.
14.2. Insofar as any of the Engagements cannot be transferred to the Buyer except by an assignment made with the consent of another party or by novation, then (without prejudice to any other rights of the Buyer) the following provisions shall apply:-
14.2.1. this Agreement shall not constitute an assignment or an attempted assignment of the Engagement if the assignment or attempted assignment would constitute a breach of the Engagement;
14.2.2. the Seller and the Buyer shall (at their own expense) use all reasonable endeavours to obtain, any such consent or novation;
14.2.3. until such Engagement is transferred to the Buyer, the Seller shall subcontract its obligations under the Engagement to the Buyer and shall deal with such Engagement in accordance with the requests of the Buyer. The Seller shall ensure that all benefits received by it under the Engagement (if any) are passed to the Buyer until such Engagement is transferred to the Buyer;
14.3. The Buyer shall, if the Seller shall so request, join in the execution of any novation of any such Engagement to the Buyer……."
On the same day the same parties entered into a Master Deed of Assignment ("the Master Deed") for the transfer by BR to NH of cases listed in a schedule, which included the claimant's claim. Under the terms of the Master Deed BR (referred to in the deed as "the Previous Legal Representative") purported to assign a number of retainers in respect of personal injury claims and associated CFA agreements (including that with the claimant) to NH (referred to in the deed as "the Legal Representatives"). The material provisions of the Master Deed for present purposes were as follows:
i) the definitions clause stated that:
"a reference to any "Retainer" is a reference to any contract of retainer (being a conditional fee agreement, private retainer, implied retainer, or retainer or otherwise) made within the context of the Business by the Previous Legal Representatives (or vice versa agents) with their clients or former clients listed in Schedule A to this Deed...
To continue reading
Request your trial
-
Sandyport Homeowners' Association Ltd v R Nathaniel Bain
...at page 103, Southway Group Ltd v Wolff [1991] 57 BLR 33 per Bingham LJ; and Alina Budana v The Leeds Teaching Hospitals NHS Trust [2017] EWCA Civ 1980 per Gloster LJ at para 26(i) in support of this 56 Miss Glinton submitted that, if the Court finds that the Association was validly assign......
-
Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd
...question whether a contract creates a conditional benefit is one of construction.” 90 In Budana v Leeds Teaching Hospitals NHS Trust [2017] EWCA Civ 1980 the deed of assignment, whereby the claimant expressly agreed to transfer a conditional fee agreement (“CFA”) from one firm of solicitor......
-
Frank Warren v Hill Dickinson LLP
...5.2 Secondly, that the master was wrong to treat himself as bound by Budana v Leeds Teaching Hospital NHS Trust [2017] EWCA Civ 1890, [2018] 1 W.L.R. 1965. He argues that Budana should have been distinguished such that the master should have held that the CFAs could not be validly assigned......
-
Budana: Court Of Appeal Rules That CFAs Can Be Assigned
...to continue to claim costs and success fees under pre LASPO CFA's assigned to them. Budana v The Leeds Teaching Hospital NHS Trust [2017] EWCA Civ 1980 Speed LEGAL UPDATE: The Court of Appeal has ruled that a CFA can be assigned to another firm of solicitors. The case between Alina Budana a......
-
2017 A Year In Costs
...become prevalent given the low threshold of "no reason to believe". (Shail Patel) December Budana v Leeds Teaching Hospital NHS Trust [2017] EWCA Civ 1980 The Court of Appeal finally brought clarity to the vexed problem of post-01.04.13 assignments of While (by a majority) such an "assignme......