Court of Appeal rejects bid to invalidate CFAs signed at “chaotic” meeting of class action members

CFA: meeting was not an “excursion”

The Court of Appeal has dismissed a technical challenge to conditional fee agreements (CFAs) signed by members of a class action during a meeting organised for that purpose.

It was one of the steady trickle of cases challenging CFAs under the Cancellation of Contracts Made in a Consumer’s Home or Place of Work etc. Regulations 2008, and particularly the failure to provide a right to cancel the contract.

The underlying claim in Kupeli & Ors v Atlasjet Havacilik Anonim Sirketi [2017] EWCA Civ 1037 is a class action brought by large numbers of members of the Turkish Cypriot community in London against AtlasJet which, it is alleged, failed to honour airline tickets originally bought from Cyprus Turkish Airlines.

Judgment in default was entered against AtlasJet but that judgment was later set aside. AtlasJet was ordered to pay the costs but argued that the CFAs entered into with Goldsworth Solicitors did not comply with the regulations.

AtlasJet’s point succeeded before the Master Rowley in the Senior Courts Costs Office, but failed on appeal before Mrs Justice Slade, sitting with Senior Costs Judge Master Gordon-Saker as assessor.

The case turned on regulation 5(b), which provides that the regulations apply to contracts made “during an excursion organised by the trader away from his business premises”.

The class action is organised by a Turkish Cypriot charitable organisation called the UK (Alevi) Cultural Centre, known as the Cemevi, in East London.

Lord Justice Lewison recounted that, with many members complaining about AtlasJet’s failure to honour its alleged obligations, the Cemevi’s management committee sought legal advice from Goldsworth, which said there was some merit in pursuing the case.

The question of obtaining instructions arose and it was decided to hold a public meeting, organised by the Cemevi.

Master Rowley described the meeting as “chaotic” due to the number of people who attended. He found that some claimants signed their CFAs at the meeting, but before receiving the client-care letter. A second group of claimants signed a partially completed CFA at the meeting, and also received the client-care letter after the meeting.

A third group who had not been at the meeting attended Goldsworth’s offices, where they signed CFAs and were given the client-care letter and other relevant documents.

Those in the first two groups did not receive notice of their right to cancel the contract at the time of contracting and so, if the regulations applied, the CFAs would be unenforceable.

AtlasJet argued that the meeting was “an excursion organised by the trader away from his business premises”.

Lewison LJ said the ordinary meaning of “excursion” in English, French, Italian and Spanish – as the regulation came from an EU directive – featured “pleasure or study” in almost all dictionary definitions.

“Thus in all these various languages ‘excursion’ or its cognates has a meaning which is something more than merely a trip or journey…

“What is that something more? In my judgment it is that, at the very least, the trip or journey in question is not undertaken for the very purpose of entering into the consumer contract in question. That fits with the purpose of the directive as explained in the recitals.

“The recital emphasises that the mischief against which the consumer is to be protected is the element of surprise and unpreparedness which would be occasioned if on such a trip he were to be presented with a legally binding contract to sign.”

As a matter of ordinary language, therefore, a consumer’s visit to the community centre for the express purpose of meeting solicitors with a view to instructing them to take on his case was not an excursion, he held.

Further, the meeting was not “organised by the trader”. Lewison LJ said the contact with Goldsworth was initiated by the committee, following unsuccessful attempts to interest other lawyers. The idea for the meeting came from the committee, which arranged it, albeit at the request of Goldsworth.

“It is, in my judgment, quite unrealistic to view the committee as in some way acting as agents for Goldsworth. If the committee are to be viewed as acting on behalf of anyone, they were acting on behalf of their members and other members of the Turkish community.”

Dismissing the appeal, there was, he concluded, no element of surprise in the meeting and so “in those circumstances I do not consider that the meeting can be said to have been an ‘excursion organised by the trader’.”

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