Proceedings for damages — Solicitor’s costs — Conditional fee agreement — Backdating of agreement — Solicitor failing to comply with statutory regulations — Whether conditional fee agreement enforceable — Appeal allowed
The appellant instructed a firm of solicitors (S) in connection with a personal injury claim against his employer, the respondent. S offered the appellant a conditional fee agreement (CFA), which specified a nil success fee. In the event that the respondent succeeded, he would be responsible for the legal costs, although the majority would be paid by the respondent. A letter of 28 July 2000 confirmed this arrangement.
The CFA was not signed until 23 August but it was backdated to 15 July and included a claim for a success fee of 25% of basic costs. The claim was settled pre-trial and S subsequently served an invoice pertaining to costs on the defendant which included a claim for the success fee. The costs judge held that the CFA was unenforceable owing to the solicitor’s failure to comply with the then requirements of regulations 4(2)(a) and 4(3) of the Conditional Fee Agreement Regulations 2000. S had failed to inform the appellant of the circumstances in which he might be liable, under the terms of the CFA, to pay the costs of the legal representative. He nevertheless granted the appellant permission to appeal.
The parties agreed that, once a breach of the regulations had been established, the question for the court was whether they had had a material adverse effect upon the protection afforded to the client by the regulations or upon the proper administration of justice.
Held: The appeal was allowed.
In accordance with the test stated by Brooke LJ in Hollins v Russell [2003] EWCA Civ 718; [2003] 1 WLR 2487, the breach of the regulations had not had a material adverse effect on either the client’s protection or the proper administration of justice.
However, it was wrong to seek to give an agreement retrospective effect by backdating it. If a written agreement was intended to apply to work undertaken before the agreement was concluded, it should be correctly dated and signed but expressed to have retrospective effect.
Backdating was at due, at best, to incompetence or lack of thought and, at worst, to dishonesty. It was liable to raise suspicion that it had been done to mislead third parties, including the court before which the agreement was to be placed.
Richard Wilkinson (instructed by Stewarts) appeared for the claimant; Roger Mallalieu (instructed by Berrymans Lace Mawer, of Liverpool) appeared for the defendant.
Eileen O’Grady, barrister
