CFAs in the spotlight

Cost experts are considering the implications of a high court costs dispute on the future of conditional fee arrangements.

Birmingham City Council v Rose Forde [2009] EWHC 12 concerned an appeal on costs arising from a housing disrepair case, in which the council sought to minimise its exposure. It included the issue of whether a conditional fee arrangement (CFA) signed by the tenant could have retrospective application where it was replaced by a second CFA, and where the required notice was not served on the first CFA. Mr Justice Christopher Clarke dismissed the appeal, holding on the facts of the case that the second CFA did not “completely” replace the first CFA.

Practitioners have been advised to study the judgment, particularly regarding the effectiveness of retrospective CFAs, the operation of concurrent CFAs, and undue influence of solicitor over client in revising retainer arrangements. In a separate case in December, the High Court clarified solicitors’ duties to investigate clients’ insurance funding in CFAs, in Bray Walker Solicitors & Ors v Silvera. Italian businessman Carlo Silvera claimed he was not liable to pay his solicitors, Bray Walker and Bevans, because they had failed to explore the existence of a “before the event” legal expenses insurance policy. However, Mr Justice Blake said the firm had not breached the conditional fee regulations by failing to advise on the existing expenses cover.