“Test case needed” to resolve costs dilemma of counsel signing ‘old-style’ CFA after 1 April

April dilemma: no guidance from MoJ

It will take a test case to determine the position of counsel who sign a conditional fee agreement (CFA) after 1 April when the solicitor’s was concluded before the new regime came into force, the Personal Injuries Bar Association (PIBA) has warned.

A letter to members from PIBA’s executive committee said the Ministry of Justice had not responded to a request to clarify the “deeply unsatisfactory” situation. The Civil Procedure Rules Committee has indicated that the issue is not within its remit.

PIBA has approached both the Association of Personal Injury Lawyers and the Association of British Insurers to suggest a discussion of the issue with the Civil Justice Council in a bid to reach a consensus.

However, the ABI has declined to meet – suggesting it is a matter for the courts – and PIBA vice-chairman Andrew Ritchie QC said it looked like a test case is the only way forward.

PIBA has asked any member in this situation to notify the association if their substantive case is successfully concluded within the next month or two “such that consideration could be given to PIBA stepping in for the costs issue to be resolved”.

The “obviously sensible position” is for counsel and solicitor to be covered by the same regime, the letter said. Initial Bar Council guidance suggested that the barrister would be covered by the old regime if the solicitor’s CFA was concluded before 1 April, but “we have as yet been able to establish whether the Bar Council still stands by that guidance”.

It continued: “However, there is a persuasive body of opinion, expressed by costs specialist practitioners, that, given the terms of the Conditional Fee Agreement Order 2013 as it was ultimately published, this guidance is wrong. Their view is that if counsel enters into an old-style CFA on or after 1 April, then whatever the terms of the solicitors’ CFA, and whenever the latter was concluded, counsel’s CFA will be caught by the order.

“That will mean not only (i) that the success fee will not be recoverable from the defendant, but also, and importantly, (ii) that the CFA will be unforceable if it exceeds the statutory limits.”

The letter also provided members will advice on possible options in the meantime, with the caveat that PIBA cannot guarantee that any particular course is without adverse consequences.