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	England and Wales High Court (Senior Courts Costs Office) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Spencer v Wood [2004] EWHC 90027 (Costs) (15 March 2004) URL: http://www.bailii.org/ew/cases/EWHC/Costs/2004/90027.html Cite as: [2004] EWHC 90027 (Costs)

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No.10 of 2004

Spencer v Wood
15 March 2004
Court of Appeal - Brooke, Jonathan Parker, and Maurice Kay LJJ

This case was concerned with the enforceability of a conditional fee agreement where, prior to the handing down of the judgments in Hollins v Russell [2003] 4 All ER 590, the District Judge had assessed part 2 of the claimant’s bill at nil, ruling that the CFA between the claimant and his solicitors was unenforceable because it failed to comply with Regulation 3(1)(b) of the Conditional Fee Agreements Regulations 2000.

That part of the Regulation reads:

"(1) A conditional fee agreement which provides for a success fee:

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(b) must specify how much of the percentage increase, if any, relates to the cost to the legal representative of the postponement of the payment of his fees and expenses."

In the case in issue the CFA was dated 9 January 2001, and stated that the success fee was to be 75% of the firms basic charges, and that the reasons for calculating a success fee at that level were to be set out in schedule 1 to the agreement.

However the schedule to the CFA made no reference at all to what proportion of the 75%, if any, which related to the cost to the solicitors of the postponement of the payment of their fees and expenses. Nevertheless the solicitors had disclosed their risk assessment to the other side, and there were 17 items in the list, eight of which were ticked as being applicable. A figure of 75% was written against four of them, and a figure of 50% against the other four, which included the item:

"10. Deferment of costs until conclusion of case - 50%"

The Judge below had commented that he did not know what the 50% represented, and that this constituted a fundamental breach of Regulation 3(1)(b), which made the CFA unenforceable.

As indicated the judgments in Hollins v Russell had not been handed down when the District Judge made his decision, but of course they had been by the time this appeal came before the Court of Appeal, and counsel for the appellant argued that Section 58(1) of the Access to Justice Act 1999 was too harsh in its effect, and that to achieve the result that he had sought there should be deemed to be read into the section the words "to the extent that it does not satisfy all the requirements".

On that basis he contended that if the consequences were comparatively trivial the solicitor should not be penalised by having the whole agreement rendered unenforceable.

The Court of Appeal made short shrift of that argument in the following paragraph of their judgment:

"15. In my judgment this course is not open to us. The point that Mr Buck has so boldly taken was not considered to be of any merit by any of the distinguished advocates who argued their case of Hollins v Russell because, no doubt, they would have perceived it had no merit at all. The words "shall be unenforceable" mean what they say. The law is well used to the concept that certain types of agreement are unenforceable in the context of this statute Parliament decided that unless a CFA satisfied all the conditions applicable to it by virtue of Section 58(1) it would not be exempt from the general rules as to the unenforceability of CFAs at common law. In my judgment we have to interpret the statute as we find it."

Accordingly the appeal was dismissed.