Jones v Attrill
| Jurisdiction | England & Wales |
| Judge | Sir Anthony Clarke MR |
| Judgment Date | 11 December 2008 |
| Neutral Citation | [2008] EWCA Civ 1375 |
| Docket Number | Case No: A2/2008/0781 A2/2008/1125 Claim No 7LV50506 Case No HQ05X00067 Claim No 6SO08237 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 December 2008 |
[2008] EWCA Civ 1375
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE LIVERPOOL COUNTY COURT
THE HIGH COURT OF JUSTICE
SUPREME COURT COSTS OFFICE
THE SOUTHAMPTON COUNTY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Anthony Clarke Mr
Lord Justice Dyson and
Lord Justice Jackson
Case No: A2/2008/0781
A2/2008/0873
A2/2008/1125
Claim No 7LV50506
Case No HQ05X00067
Claim No 6SO08237
(1) Mr Nicholas Bacon (instructed by Warner Goodman LLP) for the Appellant
Mr Robert Marven (instructed by Messrs QM Solicitors) for the Respondent
(2) Mr Robert Marven (instructed by Messrs QM Solicitors) for the Appellant
Mr Benjamin Williams (instructed by Messrs Leigh Day & Co) for the Respondent
(3) Mr Michael Pooles QC and Mr Roger Mallalieu (instructed by Messrs Walton Mills & Co) for the Appellant
Mr Jeremy Morgan QC and Mr Alexander Hutton (instructed by Beachcroft LLP) for the Respondent
Mr Richard Drabble QC and Mr David Holland (instructed by The Law Society) for the Intervenor in each case
Hearing dates: 17, 18 and 19 November 2008
This is the judgment of the court to which all its members have contributed.
Introduction
These three linked appeals principally concern the true construction of regulation 4(2)(e)(ii) of the Conditional Fee Agreement Regulations 2000 ('the Regulations'). In each case the claimant claimed damages for personal injuries against the defendants and in each case he or she made a conditional fee agreement ('CFA') with his or her solicitors. The claim against the defendant succeeded in each case on terms that, whether by judgment or agreement, the defendant or defendants was or were liable to the claimant in costs. The defendants say that in each case the solicitors were in breach of the Regulations in that they failed to disclose to their client that they had an 'interest' within the meaning of regulation 4(2)(e)(ii) and that, in consequence, the CFA is unenforceable against the claimant. It is common ground that, if that is correct, the claimant is not entitled to recover some or all of the costs claimed against the defendants.
It can immediately be seen that the issue in each of these appeals is not in reality between the claimant and the defendants but between the claimant's solicitors and the defendants or their insurers. It is yet another round in what have become known as the costs wars between claimants' lawyers and defendants' liability insurers arising out of the introduction of CFAs in the 1990s. The Regulations have been repealed with effect from 1 November 2005 by the Conditional Fee Agreements (Revocation) Regulations 2005. It is common ground that that repeal does not affect these appeals because the Jones CFA was entered into on 26 February 2002, the Hibberd CFA on 2 September 2004 and the Tankard CFA on 7 May 2005. Nevertheless we hope that the possibility of further satellite litigation of this kind will be very much reduced in respect of CFAs entered into from 1 November 2005. However, disappointing though it is, we understand that there are a considerable number of disputes arising out of the Regulations which remain to be resolved. It is for that reason that permission has been granted for these appeals to be heard by this court as a first appeal from decisions of two district judges and a costs judge.
We regret to say that there have been a number of earlier cases in this court in which earlier skirmishes have been resolved. They include Hollins v Russell [2003] EWCA Civ 718, [2003] 1 WLR 2487 (' Hollins'), Garrett v Halton Borough Council [2006] EWCA Civ 1017, [2007] 1 WLR 554 (' Garrett'), Rogers v Merthyr Tydfil CBC [2006] EWCA Civ 1134, [2007] 1 WLR 808 (' Rogers') and Jones v Wrexham Borough Council [2007] EWCA Civ 1356, [2008] 1 WLR 1590. In so far as they are directly relevant to the issues in this appeal, we refer to these cases below. However, we do not repeat the account of the history of the costs wars set out in them because it is unnecessary (and would be dispiriting) to do so.
The Regulations and the statutory framework
The Regulations provide, so far as relevant, as follows:
“4(1) Before a conditional fee agreement is made the legal representative must
(a) inform the client about the following matters; and
(b) if the client requires any further explanation, advice or other information about any of those matters, provide such further explanation, advice or other information about them as the client may reasonably require.
(2) Those matters are –
(a) the circumstances in which the client may be liable to pay the costs of the legal representative in accordance with the agreement,
(b) the circumstances in which the client may seek assessment of the fees and expenses of the legal representative and the procedure for doing so,
(c) whether the legal representative considers that the client's risk of incurring liability for costs in respect of the proceedings to which agreement relates is insured against under an existing contract of insurance,
(d) whether other methods of financing those costs are available and, if so, how they apply to the client and the proceedings in questions,
(e) whether the legal representative considers that any particular method or methods of financing any or all of costs is appropriate and, if he considers that a contract of insurance is appropriate or recommends a particular such contract -
(i) his reasons for doing so, and
(ii) whether he has an interest in doing so.
(3) Before a conditional fee agreement is made the legal representative must explain its effect to the client.
….”
(5) Information required to be given under paragraph (1) about matters in paragraph (2) (a) to (d) must be given orally (whether or not it is also given in writing), but information required to be so given about matters in paragraph (2)(e) and the explanation required by paragraph (3) must be given both orally and in writing.
….”
The previous regulations, which were the Conditional Fee Agreements Regulations 1995, were revoked by regulation 7.
It is common ground that the effect of section 58 of the Courts and Legal Services Act 1990, as substituted by the Access to Justice Act 1999, is that every CFA must comply with the Regulations and that failure to do so makes the CFA unenforceable, with the result that in such a case the CFA is unenforceable against the claimant, as the solicitors' client, and the claimant cannot recover the profit costs and success fee as party and party costs from the defendant. We understand that there is scope for dispute as to the recoverability of the ATE premium and disbursements, or some disbursements, but issues of that kind do not fall for determination in this appeal.
The Accident Line Scheme
At the request of the court, the parties have agreed a summary of what they call 'the ALP Scheme', which, as we understand it, is short for Accident Line Protect. It is sufficient for the purposes of this judgment to quote the summary agreed by the parties as follows (retaining the references to the bundles for ease of reference by the parties):
“1. Two versions of the AL manual appear in the Core Bundle: [ CB/44–123] applies to Hibberd; [ CB/124–211] applies to Jones and Tankard. Where appropriate, references relate first to the earlier version and second to the later version.
2. ALP is a membership scheme, with an annual fee. Solicitors may join if they meet quality standards, eg having a Personal Injury Panel member within each relevant office.
3. Membership includes the following benefits [CB/33]:
a) Delegated authority to issue ALP insurance.
b) A right to receive referrals of cases from AL.
c) Access for clients to a dedicated disbursement and premium funding facility with the Bank of Ireland ['BoI'] (optional).
d) Access to ancillary services related to training, marketing, administrative support and advice and continuing professional development.
4. To support (b), AL conducts marketing activities (eg television, leaflets in post offices and CABs and other advertising), and has a nationwide telephone number connected to call centres. There is an initial consideration of the potential case by an AL trained adviser. Prospective clients are then passed to member firms on grounds of proximity. No referral fees were payable at any material time [ CB/51; CB/153].
5. It is a condition of membership that an ALP policy must be effected in all qualifying cases which the solicitor conducts on a CFA, save where those cases were referred by a third party which specifies use of a different insurance. Essentially all personal injury cases qualify for ALP cover, except clinical negligence cases, those funded by other means, including BTE and cases where the client or solicitor does not wish to use a CFA. See [ CB/52–61; CB/134 & 142/3].
6. The ALP premium is payable immediately. It may be funded by the client personally (from his own savings or by borrowing, eg under the ALP facility with BoI) [ CB/63; CB/145], or paid by solicitors as a disbursement. In the 3 appeals before the court it was paid by the solicitors, although this was not the case in Puksis [ P/12/237].
7. The premium is insured, and an amount equal to it will be paid as an insured benefit if the insured fails to recover costs. If costs are...
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