Utting v McBain
28 November 2007
[2007] EWHC 3293 (QB)
Facts:
The Claimant's solicitors had entered into a CFA which provided for a success fee of 100%, and listed deferment of payment of the solicitors' fees as a reason. There was nothing in the CFA which stipulated the percentage that was related to deferment and hence unrecoverable from the Defendant. The Claimant's solicitors submitted evidence purporting to show that the percentage element for deferment was 0%, in the form of a covering letter which had been sent to the client with the CFA and which said that the client would not be liable for any costs.
Held:
(1) Regulation 3(1)(b) of the CFA Regulations 2000 requires that where a CFA lists deferment as a reason for the setting of the success fee, the percentage that relates to deferment must be stated explicitly, even if it is 0%. The CFA was therefore in breach of the Regulations.
(2) The breach was material. The fact that the client would never be required by a court to pay a deferment element was not sufficient to show that a breach was not material.
(3) The covering letter did not assist the Claimant's solicitors. It did not make any express reference to the deferment element of the success fee, and there was room for ambiguity as to whether the parties had in fact agreed any express provision as to deferment. Where a client might be left genuinely uncertain as to his liability for costs, that was a form of prejudice that the Regulations were designed to prevent.