The ‘Doorstep Regulations’ and Defective CFAs

Ridge v Lupton & Place Limited

DJ Obodai, Manchester County Court

Following the successful settlement of the Claimant’s claim for damages against his former employer for noise induced hearing loss in August 2011, the case was listed for detailed assessment of the Claimant’s costs.

It became apparent that the Claimant’s conditional fee agreement had been signed at his home, and the Defendant raised the issue of compliance with the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008 and contended that unless the CFA agreement incorporated a cancellation notice in the appropriate format, the agreement was unenforceable.

The Claimant’s solicitors, MRH Solicitors of Bolton, did not admit any potential defect, but instead entered into a new CFA with the Claimant in March 2013.  This rescinded the earlier CFA and applied retrospectively to cover all work done from the date of the Claimant’s initial instruction.  The agreement was concluded by post in order that the 2008 Regulations would not apply.

The Defendant argued that while retrospective CFAs and uplifts were permissible in certain circumstances, in the present case the Claimant’s attempt to rectify the defective retainer should fail. If at the time of the adverse costs order there had been a defect in CFA rendering it unenforceable, such that the defendant had no liability under that costs order, that defect could not be abolished by a retrospective agreement.  The retainer could not be changed to increase the costs burden on the paying party after the adverse costs order had already been made.

The District Judge accepted the Defendant’s argument, and found that the retrospective CFA was not effective and did not alter the Defendant’s liability for costs.  The Claimant’s profit costs were assessed at nil and the Claimant recovered only disbursements, paying the Defendant’s costs of the detailed assessment.

Brodie & Company were instructed to deal with the question of costs on behalf of the successful Defendant.

Hugh Rimmer (counsel for the Defendant)

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