GoodwinMalatesta - Fellow Members of The Association of Law Costs Draftsmen practising in compliance with the Byelaws & Code of Conduct of the ALCD.

   

 

Garrett v Halton Borough Council and Myatt v National Coal Board [2006] EWCA Civ 1017

August 2006

Garrett v Halton Borough Council and Myatt v National Coal Board [2006] EWCA Civ 1017

When Hollins v Russell [2003] was decided it was expected that it would end the arguments between Claimants and Defendants concerning breaches of the Conditional Fee Agreement Regulations 2000 and whether they rendered CFAs unenforceable.  To a large extent this did happen, however the decisions made in Garrett v Halton Borough Council and Myatt v National Coal Board [2006] EWCA Civ 1017 look likely to herald the return of these arguments.  Both these cases concerned the information provided to the Claimant before entering into the CFA as prescribed by Regulation 4.

Garrett concerned a case that had been referred to a solicitor by a claims management company.  Part of the terms of the solicitor’s panel membership was the requirement to recommend one of the claims management company’s own insurance policies.  Failure to promote the policies could result in the exclusion from the panel.  CFA Reg. 4(2)(e)(ii) requires the solicitor to advise the Claimant whether he has an interest in any insurance product that he recommends.  The solicitor in this case said that he did not have an interest because he received no commission from recommending the policy.  The solicitor did inform the Claimant orally that he was on a panel, but he did not advise that membership of the panel was dependant on recommending the claims management company’s own insurance policies.  In the detailed assessment the Costs Judge held that the Claimant should have been informed of the terms of the panel membership and the failure to do so resulted in a materially adverse effect on the protection afforded to the Claimant.  This decision was appealed, however the Court of Appeal held that the information required under Reg. 4 (2)(e)(ii) was not just limited to the payment of commission but also the implications of panel membership and not just the existence of a panel.  The appeal was dismissed and permission to appeal was refused.

Myatt related to a claim for damages for noise-induced hearing loss for four ex-miners.  When the solicitor took instructions the Claimants were asked over the telephone “Do you have a policy of legal expenses insurance that would cover a claim for noise-induced hearing loss against your former employer”.  The answer in each case was no.  The Costs Judge held that the inquiries were inadequate to comply with CFA Reg. 4(2)(c) that requires the solicitor to advise the Claimant whether the costs in the claim were insured under an existing contract of insurance.  Of particular relevance in this case was that the question asked required lay clients to form a judgment whether their existing insurance policies would cover an industrial disease claim.  The Court of Appeal upheld the Cost Judge’s decision on the basis that the Claimant had been asked too specific a question and in fact should have been simply asked “Do you have a policy of legal expenses insurance, either free-standing or attached to a house or motor policy or credit card?”.  The fact that no insurance policy existed was irrelevant as there was a duty to ensure compliance with CFA Reg 4 (2)(c).  The appeal was dismissed and permission to appeal was refused.

Following these judgments it is now no longer necessary to prove that the failure to comply with the CFA Regulations has had a material and adverse detriment on the Claimant to render a CFA unenforceable.  In effect the ruling in Hollins v Russell [2003] has been reversed and a paying party will now have to only prove that the Claimant’s solicitor has failed to comply with the Regulations.  We therefore appear to have returned to the days of Defendants searching for information to prove non-compliance with the Regulations and Claimants providing as little information as possible.  This judgment will not affect CFAs entered after 1 November 2005, which are governed by the Solicitors’ Practice (Client Care) Amendment Rule 2005 which adds the requirement to provide information to the Claimant under Practice Rule 15.

Please use the link attached to the case citation to see the judgment. 



<< Go back

 

     
    The information on this site is for general information purposes only. It does not constitute professional advice, whether legal or otherwise, and does not purport to be comprehensive. Goodwin Malatesta Cost Control is the trading name of Goodwin Malatesta Cost Control Ltd. and does not accept responsibility for loss that may arise from accessing or relying upon the information contained in this site. The contents of this site are protected by copyright. You may read the contents and make copies for your own personal use. You may also give copies of reasonable extracts on an occasional basis free of charge to your contacts for their personal use provided that Goodwin Malatesta Cost Control Ltd. is acknowledged as the source, the text is not altered in any way, and this warning is brought to their attention. Any other use or copying of the contents of this site is prohibited, unless Goodwin Malatesta Cost Control Ltd. gives its prior written consent.

Date:25 September 2017     Time:21:23:54