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Birmingham City Council v Forde, High Court, 13 January 2009

2 February 2009
The issues

Costs – Conditional Fee Agreement – success fee – whether CFA can be retrospective.

The facts

The Claimant brought a claim against the Local Authority for housing disrepair. She entered into a Conditional Fee Agreement with her solicitors. There was a concern about the validity of the CFA on the part of the solicitors who, shortly before proceedings were issued, wrote to her in order to ask her to sign a second CFA. The letter said that if the Court said the second CFA was invalid, they would rely on the first CFA. The second CFA had a success fee. The first CFA did not. When the matter came before the Master it was ruled that the letter formed part of the second CFA and that the agreement to act amounted to adequate consideration and that the presumption of undue influence did not arise. The Master also ruled that a retrospective success fee was not permissible but that it did not invalidate the second CFA.

The Local Authority Appealed.

The decision

The letter was part of a retainer.

As the second CFA had been entered into under the post 2005 regime it had not been necessary for the Claimant to sign the letter for it to have contractual effect. Nor did the CFA have to be in one document.

The consideration consisted in continuing to act. There was no prohibition on a CFA being retrospective and no reason why a retrospective success fee should be viewed as contrary to public policy. To this extent the decision in King v Telegraph Group Ltd was disapproved. The Court had the powers to disallow or reduce unreasonable retrospective fees.

Appeal dismissed.

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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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