Court Overturns Earlier Decision and Finds that a CFA Can Be Assigned

Article

31 May, 2016

An appeal at Liverpool County Court has overturned a decision that a conditional fee agreement had not been validly assigned. In Jones v Spire Healthcare (Appeal No 96/2015), Judge Graham Wood QC held that an insolvent firm of solicitors can validly assign its entitlement and responsibility under a CFA with a client to another firm of solicitors.

In his judgment, His Honour Judge Graham Wood QC held that 'both the benefit and the burden' of the CFA were successfully assigned, and 'there was a valid retainer allowing recovery of both pre- and post-assignment costs', adding that 'the indemnity principle is satisfied'. He confirmed that he was bound by the High Court decision of Jenkins v Young Brothers Transport Ltd [2006] EWHC 151, which allows for the transfer of personal contracts between solicitor and client.

Forbes comment

Clearly a Court of Appeal decision is required, whilst His Honour Judge Graham Wood QC expressed that he was bound by the decision in Jenkins, he stopped short of expressing a view on whether the Jenkins decision is correct. He noted "There are also other cases awaiting my decision, and it appears that a higher appellate court may become engaged on the grounds that this is a matter of public importance and wider ramification."

In the meantime, the decision will undoubtedly be welcomed by claimant firms who have bought pre-Jackson CFAs on the basis that the recoverable success fees and ATE premiums would be recoverable.

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