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21/01/2009

Retrospective CFAs on appeal

Birmingham City Council v Forde [2009] EWHC 12 (QB) was the High Court hearing of Birmingham’s appeal from the High Court (Costs) case we reported on in August last year.

In short, the appeal was dismissed, and the judgment of the Costs Judge upheld, but in a lengthy and detailed judgment, there are some considerable differences to the reasoning and the findings of the Costs Judge that are worth noting. In particular, the new elements are:

i) the finding that there is no policy, or other, reason why CFAs, including the success fee, should not be retrospectively effective; (with the exception of when proceedings had been issued and notice of funding had not been served at the same time or within seven days, or the notice of funding had not specified a success fee. The success fee could be retrospectively changed between client and solicitor without notifying the opponent, if the original notice specified a success fee);  and

ii) that where one CFA is signed after another for the same matter, the second CFA does not automatically mean that the first CFA is null in all circumstances.  Given that McGrath’s in this instance had specified that if CFA2 were to be found unenforceable, they would rely on CFA1 in a letter sent with CFA2, this would indeed stand.

The argument on consideration for the signing of the second CFA in this case is also worth attention. It was found in this case that there was consideration for the client signing the second ‘replacement’ CFA, despite the apparently (although in practice negligibly) disavantageous imposition of a success fee on the client, as the second CFA included appeals (and also continuing to act where remuneration was otherwise in doubt). I mention this because the finding on consideration is pretty fact specific.

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

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