Hollins v Russell; Tichband v Hurdman; Dunn v Ward; Pratt v Bull; Worth v McKenna; Sharratt v London Central Bus Company Ltd and two other cases

JurisdictionEngland & Wales
JudgeLord Justice Buxton,Lord Justice May,Lord Justice Kennedy,Lord Justice Brooke,LORD JUSTICE BROOKE
Judgment Date20 May 2004
Neutral Citation[2003] EWCA Civ 974,[2004] EWCA Civ 575,[2003] EWCA Civ 718
Docket NumberCase No: 2003/2022,Case Nos: A2/2003/0018; A2/2002/2326; A2/2002/2413; A22002/2647
CourtCourt of Appeal (Civil Division)
Date20 May 2004

[2003] EWCA Civ 718

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM OLDHAM COUNTY COURT

Judge Tetlow

District Judge Simpson

Altrincham

County Court

Chester County

Court

Taunton County

Court

Supreme Court

Costs Office

Before:

Lord Justice Brooke

Lady Justice Hale and

Lady Justice Arden

Judge Holman

Deputy District Judge Brooks

Judge Barnett

District Judge

Wallace

Judge Cotterill

Deputy District

Judge Roach

Liverpool County

Court

Judge Marshall-Evans QC

District Judge

Wright

Master Hurst

Case Nos: A2/2003/0018; A2/2002/2326;

A2/2002/2340; A2/2002/1963;

A2/2002/2413; A22002/2647

A2/2002/2326

A2/2002/2340

A2/2002/1963

A2/2002/2413

A2/2002/2647

Between:
Bradley Hollins
Appellant
and
Rev S H Russell
Respondent
Mark Edward Tichband
Appellant/Claimant
and
Mrs B HURDMAN
Respondent/Defendant
Alison Dunn
Appellant/Claimant
and
Helen Ward
Respondent/Defendant
Dora May Pratt
Appellant/Claimant
and
Daniel David Michael Bull
Respondent/Defendant
John Joseph Worth
Respondent/Claimant
and
James Joseph Mckenna
Appellant/Defendant
Gerald Sharratt
and
London Central Bus Company Limited and other cases
The Accident Group Test Cases

Richard Drabble QC & David Holland (instructed by Gruber Garratt) for the Appellant and also for the Law Society (intervening in all these appeals)

Ian McLaren QC & Andrew Hogan (instructed by DLA) for the Respondent

And five other appeals whose names and representations appear on the following page

Guy Mansfield QC & Nicholas Bacon (instructed by Colemans-CTTS) for the Appellant

Ian McLaren QC & Andrew Hogan (instructed by DLA) for the Respondent

Ian McLaren QC & Andrew Hogan (instructed by DLA) for the Appellant

Guy Mansfield QC & Nicholas Bacon (instructed by Amelans) for the Respondent

Ian McLaren QC & Andrew Hogan (instructed by DLA) for the Appellant

Jonathan Dingle (instructed by the Stokes Partnership) for the Respondent

Ian McLaren QC & Andrew Hogan (instructed by DLA) for the Appellant

Nicholas Bacon (instructed by Irvings) for the Respondent

Ian Burnett QC, Deborah Taylor & Benjamin Williams (instructed by Beachcroft Wansboroughs, Carters and Vizards Wyeth) for the Appellants/Defendants

Timothy Charlton QC & Nicholas Bacon (instructed by Rowe Cohen) for the Respondents/Claimants

SUMMARY

(This Summary forms no part of the Judgment)

In these six appeals the court has been concerned with a number of aspects of the new Conditional Fee Agreement ("CFA") regime which came into effect in April 2000. The judgment is in seven parts.

In Part 1 (paras 1–40) the court describes the different forces at work in the period leading up to the creation of the new regime (paras 9–14, 25–29, 37–40). It gives details of the Act and the Regulations which brought it into effect (paras 15–21, 30–36) and refers to the "indemnity" principle" which ensures, for instance, that a defendant cannot be held liable to pay costs to a successful claimant if the claimant is not legally liable to pay those costs (paras 22–24).

In Part 2 (paras 41–50) the court identifies the issues raised by these appeals and the concerns of the intervening parties, who include the Law Society (paras 44–48.). It also mentions the worries expressed by the House of Lords about the opportunities for abuse opened up by the new regime (paras 49–50).

Parts 3 and 4 contain the main substance of the judgment. In Part 3 (paras 51–67) the court distinguishes the case of Bailey v IBC Vehicles Ltd [1998] 3 All ER 570 and makes it clear that in future when a receiving party relies on a CFA (with or without a success fee) the costs judge should put him to his election whether he will disclose the CFA to the paying party or endeavour to prove his entitlement to the costs he claims by some other means (para 71). On the other hand he should not ordinarily be required to produce attendance notes (para 81). The court expressed the hope that in practice receiving parties will disclose the CFA without more ado (para 82). The court therefore allowed two appeals in which the circuit judge had not put the receiving party to his election (para 87).

In Part 4 (paras 88–116) the court gives guidance to costs judges in cases where the paying party alleges that a CFA is unenforceable because there has been a breach of one or more of the relevant regulations. It suggests that they should ask themselves: "Has the particular departure from a regulation pursuant to section 58(3)(c) of the 1990 Act or a requirement in section 58, either on its own or in conjunction with any other such departure in this case, had a materially adverse effect either upon the protection afforded to the client or upon the proper administration of justice?" If the answer is "yes" the conditions have not been satisfied. If the answer is "no" then the departure is immaterial and (assuming that there is no other reason to conclude otherwise) the conditions have been satisfied. The court also referred to the recoverability of the "After The Event" insurance premium and the disbursements which a client had paid or to which he was committed in cases where the CFA itself was held to be unenforceable (paras 113–116)

In Part 5 (paras 117–218) the court applies these principles in determining the appeals in which a breach of the regulations is alleged. It finds that there was no material breach in any of the cases. In The Accident Group Test cases the court explained its reasons for upholding the judgment of Master Hurst who had held that there was not inevitably going to be a breach of the Regulations simply because a solicitor delegated some of his obligations to a TAG representative. It laid stress, however, on the solicitor's supervisory responsibilities in these circumstances.

In Part 6 (paras 219–226) the court summarises its conclusions. In Part 7 (paras 227–228) it sets out the results of the individual appeals and the consequential orders it was making in the appeals which it allowed.

INDEX

Heading

Para No

1 Conditional Fee Agreements: the history

(i) The Courts and Legal Services Act 1990

1

(ii) Three forces at work in the late 1990s

9

(iii) The Access to Justice Act 1999

15

(iv) The indemnity principle

22

(v) Concerns about consumer protection

25

(vi) The Conditional Fee Agreements Regulations 2000

30

(vii) Two other contemporary concerns

37

2 The six appeals:

(i) The issues they raise

41

(ii) The concerns of the interveners

44

(iii) The concerns of the House of Lords

49

(iv) Matters of common ground

50

3 Disclosure of CFAs

51

4 Satisfying the conditions in section 58

88

5Particular allegations

117

Particular allegations

w118

(ii) Regulation 3(1)(b)

131

(iii) Regulation 4(2)(c)

136

(iv) Regulation 4(2)(e)(ii)

141

(v) Regulation 4(5)

145

(vi) The TAG cases: who is the "legal representative"?

155

6 Conclusions: the right approach

219

7 Results of the individual appeals

227

Lord Justice Brooke

This is the judgment of the court to which each of us has contributed.

1

Conditional Fee Agreements: the History

(i) The Courts and Legal Services Act 1990

1

Until Parliament intervened by legislation in 1990 it was always considered to be contrary to public policy, and therefore unlawful, in this jurisdiction for the financial reward which a lawyer received for his services in connection with litigation to vary depending on the outcome of the litigation.

2

In 1988 the Report of the Review Body on Civil Justice (1988, Command Paper 394, at paras 384 to 389) encouraged the Lord Chancellor to re-examine the prohibition on what it described as "contingency fees and other forms of incentive scheme". In 1989 the government took this suggestion forward, first in a Green Paper and then in a White Paper later that year. These developments led in turn to the enactment of the Courts and Legal Services Act 1990 ("the 1990 Act"). In section 58 of that Act Parliament decided to permit conditional fee agreements ("CFAs") in relation to the provision of advocacy or litigation services in certain narrowly prescribed circumstances.

3

This section provided the enabling machinery. It was brought into force in July 199Two years later CFAs became lawful for the first time. They could only lawfully be made in connection with one or other of the six types of legal proceedings mentioned in article 2(1) of the Conditional Fee Agreements Order 1995 ("the 1995 Order"). They also had to comply as to form with the Conditional Fee Agreements Regulations 1995 ("the 1995 Regulations").

4

When he sought approval of the 1995 Order in the House of Lords (HL Hansard, 12 June 1995, p 1544) the then Lord Chancellor said that the whole purpose of permitting conditional fees in these cases was to extend access to justice. He also wished to increase consumer choice. He had sought to balance the need for clients and solicitors to be free to reach an agreement which reflected their mutual interests according to individual circumstances with the need for a framework which provided appropriate protection for the client. His aims could not be achieved by stifling the scheme with over-regulation.

5

Against this background the 1995 regulations were comparatively simple. In short, a lawful CFA had to be in writing and state:

"(a) the particular proceedings or parts of them to which it relates …;

(b) the circumstances in which the legal representative's fees and expenses … are payable;

(c) what, if any, payment is due –

(i) upon partial failure of the specified circumstances to occur;

(ii) irrespective of the...

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