Court of Appeal
Date: 28/07/06

The Issues: The Claimant retained solicitors to pursue her personal injury claim. Their retainer letter to her said: "If your claim is disputed by your opponent and you decide not to pursue your claim then we will not make a charge for the work we have done to date." No CFA was ever signed. Did this retainer letter amount to a Conditional Fee Agreement so as to be caught by Section 58 of the Courts and Legal Services Act 1990 and therefore unenforceable because it did not comply with that Act or the CFA Regulations in force at the time?

Held: Section 58 defines a CFA as an agreement to provide litigation services. Section 119 of the same Act provides that this must relate to “contemplated proceedings”. No proceedings can be contemplated before a Defendant indicates a dispute. Work prior to there being a “real likelihood” of proceedings was not “litigation services”. The retainer was not a CFA, and the costs incurred under it could be recovered from the Defendant.

Comment: This is important authority which will normally allow a Claimant to recover the cost of preliminary work carried out at the early stage of a claim before a CFA is entered into. It may also assist in recovering costs where an informal “No Win No Fee” agreement is mistakenly entered into. Alternatively, it may be possible to enter into a retrospective CFA which covers previous work - see Forde v Birmingham CC (2009).

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