In Budana the Court of Appeal have ruled that it was possible to transfer an “old style” CFA to a different solicitor after 1 April 2013.
The Law Society intervened in the case estimating that there could be “tens of thousands” of clients affected by the decision and because there have been a number of conflicting first-instance judgements.
Ms Budana fell whilst visiting the defendant hospital and suffered injury. She instructed Baker Rees (BR) on a CFA. On 22 March 2013 i.e. 8 days before the LASPO changes took effect, BR wrote to her that her they were no longer going to do PI but proposing a transfer to Neil Hudgell (NH), stating that there would be automatic transfer on 25 March 2013 unless they heard from her. NH contacted Ms Budana on 31 March, went on the record on 1 April and on 10 April C wrote confirming her agreement. Liability was later admitted and the case settled for some £4k. On detailed assessment and then in the ensuing litigation the Defendant argued that the claimant could recover only her base costs under the NH CFA, and not any costs or success fee under the BR CFA. On the defendant’s case, the BR CFA was terminated following the 22 March letter; alternatively, even if the BR CFA had survived, it could not have been transferred to NH by assignment but, instead, could only have been novated after 1 April 2013. The novated contract was therefore a new contract entered into post-LASPO, and thus it fell foul of section 44 of LASPO and articles 4 and 5 of the related CFA Order. Accordingly, the defendant contended that the only enforceable contract under which NH supplied legal services and in respect of which the claimant could recover costs was the NH CFA i.e. on the “new- style” CFA
The Judge at first instance found that the BR agreement has been terminated by the 22 March 2013 letter and so there was no agreement left to transfer. The Court of Appeal allowed the appeal but, by a majority, on the basis that there had been a novation not a transfer but a novation, in the circumstances, was enough. As Gloster LJ said: In my judgment, the issues which fall for determination in this case have to be approached with an appreciation of the economic environment in which personal injury litigation is conducted today”.
Napier Miles / 2nd Feb 2018
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