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Moore v Andrews, Bournemouth County Court, 8 August 2005

13 September 2005
The issues

Conditional Fee Agreement – Failure To Specify That Part Of Success Fee Relating To Postponement Of Payment Of Charges And Disbursements – Material Defect – Enforceability

The facts

The Claimant had succeeded in a personal injury claim against Defendant and was entitled to recover costs. The case had been funded by a Conditional Fee Agreement. The CFA had been disclosed in the detailed assessment proceedings. The body of the agreement said that the client could not recover from her opponent the part of the success fee that related to the cost to the solicitors of postponing receipt of their charges and disbursements as set out in the Schedule and that that part of the success fee remained payable by her. However, the Schedule did not refer to postponement.

The Defendant argued that the CFA was in breach of Regulation 3 (1)(b) of the Conditional Fee Agreements Regulations 2000 in that it failed to specify how much of the success fee related to postponement of payment of charges and disbursements and that it was a material defect which rendered the CFA unenforceable in accordance with the Court of Appeal decision in Spencer v Wood.

Claimant’s solicitors argued that no part of the success fee related to postponement and therefore it was not necessary to apportion the success fee and there was no breach. They further argued that if there was a defect, under the overriding objective of CPR, it was neither fair nor proportionate to deprive them of their costs.

The decision

1. The purpose of the Regulations was to afford protection to the client so that she was aware that if there was part of the success fee for which she may be responsible that was not recoverable. The CFA made reference to part of the success fee not being recoverable for postponement but it did not specify what part was attributable to postponement.

2. It was a material defect in that the client reading the CFA would not know the amount she would have to pay to her solicitors in the event of success. The overriding objective could not be relied upon as the word “unenforceable” meant what it said in accordance with Spencer v Wood.

3. The CFA was unenforceable against the Claimant and by virtue of the indemnity principle, the solicitors profit costs and success fee were disallowed in full against Defendant.

Comments

Enquiries to John Allen, Law Costs Consultant at +44 (0)1363 866 816 or jdalawcosting@btconnect.com

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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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