Boxing promoter Frank Warren has failed in his effort to avoid paying his solicitors under conditional fee agreements (CFAs) where he did not receive any damages or costs despite winning his case.
The case also saw a Senior Courts Costs Office judge apply the Court of Appeal’s recent ruling in Budana , allowing the assignment of CFAs.
It involved two cases where Mr Warren instructed his longstanding solicitor Hanna Basha, who was originally at Carter-Ruck, then at PSB Law and, from September 2013 to January 2016, at Hill Dickinson, the defendant in the case.
The cases were against boxer Ricky Burns for breach of contract and against Mr Burns’ manager, Alex Morrison, for defamation. Both started when Ms Basha was with PSB, under CFAs that obliged Mr Warren to pay the firm’s fees in the event of success.
Mr Warren was awarded damages and obtained default costs certificates in both cases. However, he has not recovered anything from either due to the defendants’ bankruptcies.
Though the outcomes met the definition of ‘win’ in the CFAs, Mr Warren claimed that there was an agreement that Ms Basha would only recover fees from Mr Warren in the event there was a ‘net gain’ to him.
Mr Warren argued that, not having recovered any money, he had not made a net gain, meaning he should not have to pay anything.
Master Leonard found no evidence to support this. The contractual documentation was “littered with clear references to and warnings to Mr Warren about his liability to pay his solicitors’ costs, whether recovered from an opponent or not”.
Aside from admitting that he did not read the documents he was asked to sign, Mr Warren said he was not troubled by these warnings because he knew that what Ms Basha was saying did not reflect their agreement.
“To my mind, that explanation is not credible,” said Master Leonard. “Had Mr Warren really believed that he had a standing agreement with Ms Basha which contradicted what she was saying, it would have been evident to him that either Ms Basha did not share his understanding of their agreement or (as he now claims) that she was reneging upon it.
“In either case, a great deal of money would, potentially, have been at stake and Mr Warren would have not have remained silent. He would have said something about it. He said nothing, and my conclusion is that he said nothing because he knew that what Ms Basha was saying reflected the true position.”
The judge added that, even if he accepted the net gain argument, “it seems to me that it would not furnish him with any sound basis in law for escaping the terms of either the Burns or the Morrison CFAs”.
On the assignment issue, Ms Basha left PSB on 14 September 2013. On 30 September, PSB ceased to practise as a firm of solicitors but remained open to conclude administrative matters. On 25 November, PSB entered into an ‘agreement to assign’ with Hill Dickinson. The assignment date was stated as 1 October 2013.
Mr Warren challenged the validity of this. Budana was handed down after the hearing, meaning both parties provided supplemental written submissions to address its implications.
Master Leonard said there was no “material distinction” between the facts of this case and of Budana.
“It seems to me that it cannot be correct to say that the Burns and Morrison CFAs were terminated on PSB’s ceasing to practise on 30 September 2013.
“First, that proposition relies upon [Mr Warren’s counsel Andrew Nicol’s] attempt to distinguish between (in Budana) Baker Rees being unable or unwilling to continue representing its client, and (here) PSB’s ceasing to practise as a firm of solicitors.
“To my mind there cannot be any material distinction. The effect, as regards performance of the relevant contract, would be precisely the same.
“As in Budana, even if PSB’s decision to cease practising could be treated as a repudiatory breach of the Burns and Morrison CFAs it would then have been for Mr Warren to accept that breach and to treat each CFA as terminated, and he did not.”
In any event, the judge said it was not open to Mr Warren to argue that PSB’s ceasing to practise on 30 September 2013 constituted a repudiatory breach of contract.
“I have seen no evidence to suggest that, if PSB had been told that Mr Warren wished PSB to continue to represent him, it could or would not have done so.
“On the evidence, PSB at all times performed its obligations under the Burns and Morrison CFAs to the extent that Mr Warren required it to do so. It was never in breach.”
As a result, Hill Dickinson could enforce the terms of the CFAs against Mr Warren, he said.
Master Leonard said he generally preferred Ms Basha’s evidence. Aside from findings in the Burns and other claims that he had given “untruthful evidence”, the judge said he found Mr Warren’s evidence in this case “inconsistent and frequently at odds with the weight of the evidence”.