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The Accident Group Test Cases (Sharratt v London Central Bus Company and Others), Supreme Court Costs Office

4 December 2002
The issues

Whether under the Accident Group Scheme the required information is given by a legal representative within the meaning of Regulations 1 and 4 of the Conditional Fee Agreement Regulations 2000 and if not, what consequences are there for the Claimant’s claim for costs.

The facts

19 test cases were identified. Two of the test cases stood out from the 19, Orton -v- Thompson in which the issue did not arise and Viegas -v- Hawker because of the suggestion that relevant information was given to the client by a Solicitor as well as a TAG representative. The TAG scheme is such that a Panel Solicitor for TAG had to enter into an agreement with TAG. That agreement specified that the “appointed representative” was a firm of solicitors specialising in Personal Injury, which had agreed to act on the Claimant’s behalf in bringing an action for personal injury against the Defendants.

The Claimants were identified as individuals where the appointed representative was satisfied that they had “in their reasonable opinion” a better than 50% chance of success and where damages could reasonably be expected to exceed £1,500.00 (“a bona fide claim”). There were 5 successive “operating manuals” under which the test cases were conducted. Master Hurst considered for the purposes of this case only number 5, the most recent. Under the Manual, Panel Solicitors were required to use a standardised model client care letter and CFA. Cases allocated to the Solicitor by the TAG Claims Allocation Team could be rejected or accepted. If accepted, the Panel Solicitor had to send an unsigned client care letter with a CFA and an Accident Investigations Limited Questionnaire and Fact Find Oral Examination sheet to TAG. A copy of the client care letter, CFA Terms and Conditions had also to be sent to the client using the TAG standard letter.

The Accident Group Instructions Team would then contact the client to make an appointment for a home visit. The TAG representative would orally explain the CFA as Agent for the appointed representative and complete the Fact Find and Oral Explanation Sheet. The client was strongly advised not to sign anything until the visit had taken place. The client care letter, having been signed by the client was to be returned to the Solicitor who would thereafter sign it and certify that prior to the signing of the agreement they, or their duly authorised agent had verbally explained to the client the required matters. The Panel Solicitor would then sign the CFA having received it from TAG, send it to the client keeping a copy for himself and endeavour to speak to the client about the case within 7 days. Before this point, the Panel Solicitor would have no direct contact with the client. The issue was whether the TAG representative was the solicitor’s agent for the purposes of the Access to Justice Act and the Conditional Fee Agreement Regulations 2000.

The decision

1. A “Legal Representative” for the purposes of Regulation 4 of the CFA Regulations 2000 might be an individual, a firm or a recognised body.

2. Delegation within the firm or recognisable body was permissible. It was unrealistic to interpret Regulation 4 as meaning that the explanation could be given only by a Partner in the firm.

3. Delegation was permissible to any duly authorised agent. A question of fact might arise as to whether the agent was competent to carry out the required task or as to whether the task had actually been carried out competently. The Defendants argued that the TAG representative was not a person with sufficient discretion or skill to give the relevant Regulation 4 information because the Solicitors had no control whatsoever over him or her. The Defendants were concerned that there was no possibility of real supervision and that the TAG representative was entirely unknown to the Solicitor for whom he was acting and from whom he received no instructions. It could not be they said, that the TAG representative could in those circumstances discharge the obligations of Regulation 4 simply by reading out a prepared statement. The answer to this however, was that there was nothing in the general law of delegation and agency or in the CFA Regulations which prevented delegation of the Regulation 4 task to a properly appointed agent. The essential question was one of quality, ie was there sufficient explanation given by or on behalf of the legal representative?

4. Where Regulation 4 was not complied with, it would be unenforceable. An unenforceable CFA would also be unenforceable at common law for illegality. If the CFA had not been complied with, no costs therefore would be recoverable under it. “I am firmly of the view that if Parliament has laid down that a CFA shall be unenforceable if it does not comply with the requirements laid down by the Lord Chancellor, it is not for the Court to try and find a way round that sanction”.

5. If the CFA failed, ATE premiums might still be recoverable however. The premium was not part of the retainer under the CFA and was not therefore within the terms of the preliminary issue.

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