Frank Warren v Hill Dickinson LLP
| Jurisdiction | England & Wales |
| Judge | Mr Justice Pepperall |
| Judgment Date | 30 November 2018 |
| Neutral Citation | [2018] EWHC 3322 (QB) |
| Date | 30 November 2018 |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB/2018/0186 |
[2018] EWHC 3322 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE SENIOR COURTS COSTS OFFICE (MASTER LEONARD)
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HONOURABLE Mr Justice Pepperall
sitting with Master Haworth as a costs assessor
Case No: QB/2018/0186
Patrick Lawrence QC and Andrew R. Nicol (instructed by Russells) for the Appellant
Nicholas Bacon QC (instructed by Hill Dickinson LLP) for the Respondent
Hearing date: 30 November 2018
Frank Warren is a well-known licensed boxing promoter and manager. By a claim issued on 19 May 2016, Mr Warren sought a detailed assessment of four bills rendered by his former solicitors, Hill Dickinson LLP, totalling some £922,890.03. The bills were rendered pursuant to the purported assignment of two conditional fee agreements (“CFAs”) that Mr Warren had entered into on 27 March 2013 with his former solicitors, PSB Law LLP.
By his claim, Mr Warren took four points:
2.1 First, that the CFAs were unenforceable in that the CFAs did not reflect the true agreement between the parties.
2.2 Secondly, that he was not liable under the CFAs because he had not been successful in the underlying litigation against the boxer, Ricky Burns, and a defamation claim against Mr Morrison.
2.3 Thirdly, that the costs billed were unreasonable.
2.4 Fourthly, that the CFAs had not been validly assigned to Hill Dickinson.
The second and fourth issues were tried as preliminary issues by Master Leonard between 13 and 16 November 2017. The master handed down his judgment on 26 March 2018. It can be found at [2018] EWHC B6 (Costs). By his judgment, the master found that the CFAs were validly assigned to Hill Dickinson and that both sets of proceedings had been successfully concluded such that the solicitors were entitled to payment of both their base fees and success fees pursuant to the terms of the two agreements.
Mr Warren now seeks to appeal against the master's judgment on the assignment point. On 15 August 2018, Sir Alistair MacDuff considered the Appellant's Notice and ordered that Mr Warren's application for permission to appeal should be listed for hearing before a High Court judge with, if successful, the appeal to follow immediately afterwards. The matter is now before me. I am sitting with Master Haworth as a costs assessor. This judgment is my own, but I am grateful to Master Haworth for his advice and assistance in this appeal
THE GROUNDS OF APPEAL
By his Appellant's Notice, Mr Warren seeks to argue two grounds:
5.1 First, that, having found that PSB Law ceased to practise on 30 September 2013, the judge was wrong to conclude that the CFAs remained capable of valid assignment.
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 at all. Further, the CFAs could not be assigned without Mr Warren's informed consent, which, he argues, was not properly obtained.
BUDANA
Before considering these grounds further, it is appropriate to explain the Court of Appeal's recent decision in Budana in respect of the assignment of CFAs between law firms. Ms Budana signed a CFA with Baker Rees in 2011 in respect of her intended personal injury claim against the NHS Trust. Before her case could be concluded, Baker Rees withdrew from personal injury work in view of the reforms made by the Legal Aid, Sentencing & Punishment of Offenders Act 2012 [“ LASPO”]. Accordingly, on 25 March 2013, the law firm purported to assign its CFA with Ms Budana and a number of other clients to Neil Hudgell Limited. Subsequently, on 10 April 2013, Ms Budana signed a formal letter instructing Neil Hudgell to act for her and an assignment of the original CFA in favour of her new solicitors. Lest such assignment was ineffective, on 17 May 2013, Ms Budana signed a further CFA with Neil Hudgell that was expressed to be effective only in the event that the assignment was not.
Ms Budana's claim was settled but the defendant trust argued that she was only entitled to recover her base costs under the new CFA with Neil Hudgell and that the purported assignment had been ineffective. In the alternative, the hospital argued that the assignment took effect as a novation made after 1 April 2013 with the consequence that it was caught by the LASPO reforms and there was no entitlement to recover a success fee.
Budana therefore raised an issue of some importance. The Court of Appeal held that the 2011 CFA had not been terminated in March 2013 when Baker Rees gave notice that it was withdrawing from personal injury work. The CFA was, however, novated in April 2013, albeit the appeal court held that such novation did not prevent the recovery of the success fee under the pre- LASPO regime.
The decision in Budana was handed down after the trial before Master Leonard in this case but before he handed down his reserved judgment. Accordingly, the oral argument before the master had addressed the case in terms of assignment; that being the prevailing orthodoxy following the judgment of Rafferty J in Jenkins v Young Bros Transport Ltd [2006] EWHC 151 (QB), [2006] 1 W.L.R. 3189.
In his impressive and well-structured submissions, Mr Lawrence fairly and properly conceded that nothing directly turns on the master's characterisation of the transfer as an assignment save for one matter that I address below in respect of informed consent. I agree with Mr Lawrence. While, following Budana, I consider that the proper analysis of this case is to consider it in terms of novation rather than assignment, permission should not be granted simply because of the master's finding of an assignment unless it is properly arguable that there was no novation.
GROUND 1: CESSATION OF PRACTICE
By this ground, Mr Warren seeks to argue that the CFAs were not capable of assignment by a law firm that had ceased to practise and which was thereby incapable of performing its obligations under the agreements. In any event, he argues that PSB Law had terminated the CFAs.
The master dealt with the termination point at paragraphs 132–134:
“132. It seems to me that it cannot be correct to say that the Burns and Morrison CFAs were terminated on PSB's ceasing to practise on 30 September 2013. First, that proposition relies upon Mr Nicol's attempt to distinguish between (in Budana) BR's being unable or unwilling to continue representing its client, and (here) PSB's ceasing to practise as a firm of solicitors. To my mind there cannot be any material distinction. The effect, as regards performance of the relevant contract, would be precisely the same. As in Budana, even if PSB's decision to cease practising could be treated as a repudiatory breach of the Burns and Morrison CFAs it would then have been for Mr Warren to accept that breach and to treat each CFA as terminated, and he did not.
133. In any event, on the facts of this case it does not seem to me to be open to Mr Warren to argue that PSB's ceasing to practise on 30 September 2013 constituted a repudiatory breach of contract. To my mind, Mr Nicol equates ceasing to practise with dissolution. PSB must, on the evidence, have been advised by Ms Basha, before her departure on 14 September 2013, of the fact that Mr Warren had elected to take his business with her. PSB's ceasing to practise post-dated her departure, and may well have been (at least in part) a consequence of it.
134. I have seen no evidence to suggest that, if PSB had been told that Mr Warren wished PSB to continue to represent him, it could or would not have done so. On the evidence, PSB at all times performed its obligations under the Burns and Morrison CFAs to the extent that Mr Warren required it to do so. It was never in breach.”
Mr Lawrence argues that the CFAs were entire contracts. He cites the classic authority of Cutter v Powell (1795) 6 T.R. 320 in which a sailor was to be paid a fixed sum for a voyage from Jamaica to Liverpool but died before the ship reached England. Dismissing his estate's claim for the agreed fee or some other payment for the sailor's services, the court held that there was no entitlement to payment for the partial performance of an entire obligation. The applicable principles are set out in Chitty on Contracts (33 rd Ed.) at para. 21–031:
“Where a party has performed only part of an entire obligation it can normally recover nothing, neither the agreed price, since it is not due under the terms of the contract, nor any smaller sum for the value of its partial performance, since the court has no power to apportion the consideration. The refusal of pro rata payment is based on the inability of the court, as a matter of construction, to add such a provision to the contract, and also upon the rule that the mere acceptance of acts of part performance under an express contract cannot, taken alone, justify the imposition of a restitutionary obligation to pay on a quantum meruit basis.”
The first footnote to this passage adds:
“The failure to complete need not be a breach of contract: Cutter v Powell … The contract in effect provides that the risk of non-completion is to be borne by the party undertaking the relevant obligation.”
Here, Mr Lawrence argues, the risk of non-completion of the...
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