Gaynor v Central West London Buses Ltd  EWCA Civ 1120
The above appeal considered the meaning of a Conditional Fee Agreement (CFA) and what services were covered by such an agreement. The facts of this case were that the claimant was injured while travelling on one of the defendant’s buses. She instructed solicitors who sent her a retainer letter dated 20 November 2002. This retainer set out funding arrangements for the period when the claim was being investigated and also advised that if the claim was disputed and the claimant wished to pursue the claim alternative methods of funding, including a CFA, legal expenses insurance and private funding, would be investigated. The letter also provided that if the claim was disputed and the claimant decided not to pursue the claim then no charge would be made for the work done to date.
The defendant admitted liability soon after the accident. The claimant issued proceedings in the Romford County Court on 22 January 2004 and the claim was subsequently compromised in a consent order dated 5 April 2004 that provided that the defendant should pay the claimant’s costs to be assessed, if not agreed, on the standard basis.
The costs could not be agreed and the matter proceeded to a detailed assessment before a Master where the defendant argued that the retainer was a CFA within the meaning of section 58(2)(a) of the Court and Legal Services Act 1990 and that it was unenforceable as it failed to comply with CFA Regulations 2000. The Master was not persuaded that the retainer letter was intended to be a CFA and as such decided that there was no CFA. The defendant appealed and His Honour Judge Platt allowed the appeal on the basis that the intention to enter into a CFA was irrelevant. Because the retainer letter provided for the solicitor fees to be payable only in certain circumstances it followed that the retainer was in fact a CFA. The claimant appealed this decision.
The claimant’s appeal was allowed by judgment dated 28 July 2006 when it was held that the retainer letter only offered to waive fees for modest pre-litigation services and that until the defendant disputed the claim it was impossible to contemplate proceedings. Advising a claimant on whether she has a prima facia case and writing a letter of claim were deemed not enough to amount to “litigation services” within the meaning of Section 58(2)(a) of the Court and Legal Services Act 1990. It was further held that a retainer that allowed a potential claimant to obtain legal advice and take a few steps towards litigation to see whether a defendant would admit liability without exposure to serious risk of costs was a benefit to claimants and to defendants as it avoids or delays the potential liability to pay a success fee and insurance premium that a CFA would entail.
This decision provides the opportunity for a successful claimant to recover from a defendant the costs of modest pre litigation services, including investigations and the letter of claim, even when the claimant’s solicitor has provided conditions whereby they will waive costs. The recovery of such costs is very much dependant on the construction of the retainer and when presented with a claim for pre-litigation costs that are funded by such a retainer a paying party should request that a copy of the retainer letter be provided in accordance with Bailey v IBC Vehicles  3AH ER 570.
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