Hughes v Others and Newham London Borough Council, Supreme Court Costs Office, 28 July 2005

Conditional Fee Agreement – Availability of Alternative Funding – Enforceability – Legal Services Funding – Housing Disrepair Claim

The Claimants brought housing disrepair claims against the Defendant local authority. The Claimants were represented by the same firm of solicitors. The solicitors wrongly advised the Claimants that they were not able to get Legal Aid because they would be unlikely to get past the cost/benefit test.

Consequently the Claimants entered into Conditional Fee Agreements with their solicitors. The claims settled and the Claimants awarded their costs in each case. Matters proceeded to Detailed Assessment. The Defendant argued that the CFA’s were unenforceable because the Claimants had never been informed properly of the availability of Legal Aid.

1. The Claimant’s solicitors were required under the Conditional Fee Agreements Regulation 2000 (regulation 4 (2) (d) to advise them of the availability of alternative funding.

2. That failure had a materially adverse effect upon the protection afforded to the Claimants. See Hollins v Russell. It was not enough for a Claimant to be told about Legal Aid or alternative funding if there were accompanying words which sought to discourage the client from pursuing that possibility. The burden on the solicitors was to put the client’s interests first. The advice given that legal advice was not available or was unlikely to be available was bad advice. At the time the cases were taken on the prospects of success did not appear unclear or borderline or poor.

3. As a result of the breach the CFA was unenforceable and the local authorities’ liability for costs would relate solely to paid disbursements and any costs of the assessment allowed.

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