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Gaynor v Central West London Buses Ltd, Court of Appeal, 28 July 2006

16 August 2006
The issues

Costs – retainer – Conditional Fee Agreement Regulations 2000 – whether letter stating no charge would be made for pre-litigation services amounted to a Conditional Fee Agreement.

The facts

The Claimant was injured whilst travelling on one of the Defendant’s buses which was involved in a collision with another of its buses. She went to a firm of solicitors who sent her a retainer letter dated 20th November 2002. The Defendant admitted liability soon after the accident. The Claimant eventually issued proceedings in the Romford County Court and in February Judgment was entered in default of Acknowledgement of Service. The claim was settled in the sum of £3,750.00. The Consent Order provided that the Defendant would pay the Claimant’s costs. The parties were unable to agree costs and the matter went to Detailed Assessment before the Master. It was argued that the retainer was a CFA and was unenforceable because it failed to comply with certain of the Conditional Fee Agreement Regulations. The Master found that the retainer letter was not intended to be a CFA. The Defendant appealed. The Judge allowed the CFA. The Claimant appealed to the Court of Appeal.

The retainer letter gave the firm’s hourly rates and an estimate of the likely fee if the matter proceeded to a full hearing. The last five paragraphs of the letter provided that the solicitors would not look for a payment on account because if the Defendants admitted liability the insurers would pay the legal costs. If however liability was not admitted and the matter was pursued further then the Claimant might become liable to pay for the costs of disbursements. If the claim was disputed and was pursued through litigation then a payment on account would be required but before requesting any such payment the solicitors said they would discuss alternative methods of funding the case including a Conditional Fee Agreement. The letter went on to say that if the claim was disputed and the Claimant decided not to pursue the claim then the solicitors would not make a charge for the work done to date.

The decision

Section 58(2)(a) of the Courts and Legal Services Act 1990 defined a CFA as an agreement with a person providing advocacy or litigation services.

The key question was whether “the work done to date” as referred to by the solicitors in the retainer letter came within the definition of “litigation services”.

As a matter of construction, work done before a decision is made not to pursue a claim pursuant to the last paragraph in the solicitors letter was not the provision of litigation services. Nor were they services in relation to “contemplated proceedings” (Section 119(1).) “Contemplated proceedings” were proceedings of which it could be said that there was a real likelihood that they would be issued. Until the potential Defendant disputed the claim it was not possible to say that proceedings were contemplated. Advising a client as to whether he or she had a good prima facie case and writing a letter of claim were not enough to amount to litigation services.

Appeal allowed.

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