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Thornley v Lang, Court of Appeal, 29 October 2003

4 November 2003
The issues

Collective Conditional Fee Agreement – Costs – Trade Union – CCFA.

The facts

The Claimant was a bus driver and a member of a Trade Union and recovered damages after a compromised settlement of this road traffic accident claim with the Defendant’s Insurers for £2,349.67 plus reasonable costs. Part 8 Proceedings were issued in respect of the costs and the Claimant’s Solicitors sought £2,565.97 in respect of costs, VAT and disbursements. The costs included a 20% success fee, which the Union had agreed to pay to the Union Solicitors pursuant to a Collective Conditional Fee Agreement. The Insurers were agreeable to bearing the Claimant’s costs less the success fee and before the District Judge and the Judge on Appeal, they argued that they had no liability to pay this and argued that the Claimant had incurred no liability to pay it to the Solicitors and accordingly had no right to recover it as part of his costs. Before the Court of Appeal, it was accepted by the Defendants that this argument in principle applied to the entirety of the Claimant’s costs.

The case proceeded to the Court of Appeal on the basis of the Defendant’s Insurers concession that the CCFA satisfied the requirements of Section 58 of the Courts and Legal Services Act 1990 and the relevant Regulations. Before the Court of Appeal an attempt was made to withdraw this concession and the Court of Appeal refused to allow the concession to be withdrawn on the basis that it was withdrawn too late. The Judge dismissed the Defendant’s Appeal. The Defendants appealed to the Court of Appeal.

The decision

For the purposes of these proceedings, it was presumed that the CCFA in question was a valid one that complied with the CCFA Regulations.

2. The Union made the agreement with the Solicitors with the authority of the Claimant. In the alternative, the Claimant had ratified the agreement reached by the Union on his behalf by availing himself of the services of the Solicitors.

3. On either footing, the contract pursuant to which he came under a liability to pay the Solicitors for their services was a CCFA.

4. As such, it was obliged to comply with the CCFA Regulations. It was not however subject to the CFA Regulations.

5. The Claimant had the necessary liability and was in a position to recover costs without infringing the indemnity principle.

Comments

The Insurers had argued before the High Court Judge that no enforceable obligation to pay the success fee had arisen. The Defendant had argued that the mechanism, which might have given rise to such an obligation, was in effect an individual CFA between the Claimant and his Solicitors. If such an agreement had been reached, it was not enforceable because it did not satisfy the requirements of the CFA Regulations. The Court of Appeal described this submission as being “not÷ attractive”. Hence the importance of the otherwise apparently obvious finding of the Court of Appeal that the CCFA was governed by CCFA Regulations and not the CFA Regulations. When dealing with this submission, the Judge had called into place Section 58A(6) of the 1990 Act and Section 30(2) of the Access to Justice Act 1999 on the basis that the Costs Orders provided for under those sections could be made notwithstanding that such Orders might infringe the indemnity principle. The Court of Appeal made it clear that if a CFA was unenforceable in a material respect because it did not comply with Section 58 or the CFA Regulations, that the effect of those sections was not such as to enable a litigant to recover costs.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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