Worley –v- Persimmon Homes (West Yorkshire)
The Claimant had tripped and fell due to a protective nosing on a flight of stairs becoming partially detached, which presented a hazard. In pursing the claim against the Defendant, the Claimant had entered into a CFA dated 21 June 2012, backed by a Temple Legal Protection ATE Insurance policy.
The claim concluded when the Defendant accepted the Claimant’s Part 36 offer of £15,000.00, following which a Bill of Costs was served on the Defendant.
The Defendant thereafter argued that the CFA was unenforceable under Section 58 of the Courts and Legal Services Act 1990 on the grounds that the CFA did not state the percentage by which the amount of the fees were payable if it were not a conditional fee agreement was to be increased.
A Provisional Assessment took place in the County Court at Barnsley where DJ Branchflower accepted the Defendant’s argument and assessed the Claimant’s Bill to NIL. The matter thereafter proceeded to an oral hearing on 31 January 2018.
The Defendant argued that the CFA provided for a success fee, but that it was unenforceable as it transgressed the provisions of Section 58 for two reasons:-
- There were circumstances where the CFA did not ‘state the percentage’ on the grounds that the percentage could be one of two percentages. For example if liability was admitted after the issue of proceedings and more than 45 days before the trial, but the case did not settle until less than 45 days before trial then the CFA was difficult to interpret, where it could be argued that the CFA was either 75% or 100%.
- There were circumstances where the CFA did not ‘state the percentage’ on the grounds that no percentage was stated at all. For example, the CFA did not state what the success fee was in the event of a settlement before the issue of proceedings without an admission of liability, and further the CFA did not state what the success fee was in the event of a conclusion at trial.
It was the Claimant’s argument that the claim settled less than 45 days before trial following the acceptance of the Part 36 offer. There had been no admission of liability as the Defendant had denied causation, and the success fee therefore that the claimant was required to pay her solicitors was unambiguously 100%, and any ambiguity that could be identified could be resolved using the construction of contractual provisions.
Therefore, if a claim where liability was admitted after the issue of proceedings, and did not settle until less than 45 days before trial, a client would not be able to successfully argue that she was not obliged to pay her solicitor’s charges on the grounds that the CFA was unenforceable, and would be held to pay those charges plus a success fee of at least 75%.
If a claim where no success fee at all is identified, then the inference would not be that the CFA is unenforceable but simply that no success fee is chargeable.
DJ Branchflower’s written judgment was handed down on 12 April 2018 and concluded that the CFA was unenforceable by virtue of it failing to meet the requirements of Section 53 of the Act and, by reason of the indemnity principle, the receiving party was not entitled to recover any costs under the CFA from the paying party.