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The facts relevant to the issue about notice were the same in all three cases. FAC |
As will shortly appear, the RTA Protocol prescribes a simple online form of notification of a claim (a Claim Notification Form or CNF) which contains a tick box opposite a statement that the solicitors had been retained under a CFA which provided for a success fee. FAC |
In each case Edmondson ticked the box and filled in the date of the retainer. FAC |
Thus Haven knew that information via the Portal before it began negotiating with the claimants. FAC |
Haven did not know the detailed terms of the retainers, which I shall now describe. FAC |
The CFA Lite Retainers FAC |
Each of the claimants retained Edmondson on identical terms. FAC |
They were each sent, on the same day, the following documents. FAC |
First, a document headed (under the firms logo) CFA, containing these relevant provisions: This agreement is a binding legal contract between you and your solicitor/s. FAC |
Before you sign, please read everything carefully. FAC |
This agreement must be read in conjunction with the Law Society document What you need to know about a CFA. FAC |
Paying us If you win your claim, you pay our basic charges, our disbursements and a success fee. FAC |
You are entitled to seek recovery from your opponent of part or all of our basic charges, our disbursements, a success fee and insurance premium as set out in the document What you need to know about a CFA. FAC |
The Success Fee The success fee is set at 100% of basic charges, where the claim concludes at trial; or 12.5% where the claim concludes before a trial has commenced. FAC |
In addition 5% relates to the postponement of payment of our fees and expenses and cannot be recovered from your opponent. FAC |
The Success fee inclusive of any additional percentage relating to postponement cannot be more than 100% of the basic charges in total. FAC |
Secondly, they were sent the Law Society document referred to in the above quotation. FAC |
It is a standard form document published in 2005. FAC |
It contained the following relevant provisions. FAC |
What do I pay if I win? If you win your claim, you pay our basic charges, our disbursements and a success fee. FAC |
The amount of these is not based on or limited by the damages. FAC |
You can claim from your opponent part or all of our basic charges, our disbursements, a success fee and insurance premium. FAC |
Basic charges These are for work done from now until this agreement ends. FAC |
These are subject to review. FAC |
Under the heading How we calculate our basic charges the document sets out a table of hourly rates. FAC |
Road Traffic Accidents If your claim is settled before proceedings are issued, for less than 10,000, our basic costs will be 800; plus 20% of the damages agreed up to 5,000; and 15% of the damages agreed between 5,000 and 10,000. FAC |
[If you live in London, these costs will be increased by 12.5%]. FAC |
These costs are fixed by the Civil Procedure Rules. FAC |
Provision is then made for charging VAT. FAC |
Dealing with costs if you win You are liable to pay all our basic charges, our disbursements and success fee. FAC |
Normally, you can claim part or all of our basic charges, our disbursements success fee and insurance premium from your opponent. FAC |
If we and your opponent cannot agree the amount, the court will decide how much you can recover. FAC |
If the amount agreed or allowed by the court does not cover all our basic charges and our disbursements, then you pay the difference. FAC |
You will not be entitled to recover from your opponent the part of the success fee that relates to the cost to us of postponing receipt of our charges and our disbursements. FAC |
This remains payable by you. FAC |
As with the costs in general, you remain ultimately responsible for paying our success fee. FAC |
You agree to pay into a designated account any cheque received by you or by us from your opponent and made payable to you. FAC |
Out of the money, you agree to let us take the balance of the basic charges; success fee; insurance premium; our remaining disbursements; and VAT. FAC |
You take the rest. FAC |
We are allowed to keep any interest your opponent pays on the charges. FAC |
If your opponent fails to pay If your opponent does not pay any damages or charges owed to you, we have the right to take recovery action in your name to enforce a judgment, order or agreement. FAC |
The charges of this action become part of the basic charges. FAC |
In a lengthy definitions section there is this definition of win: Win Your claim for damages is finally decided in your favour, whether by a court decision or an agreement to pay you damages or in any way that you derive benefit from pursuing the claim. FAC |
The third document is the Client Care Letter. FAC |
It deals with a number of miscellaneous aspects of the solicitor client relationship and is not primarily drafted as a contractual document. FAC |
But it contains the following relevant provisions: Costs: In this case we have advised and you have elected to enter into a conditional fee agreement. FAC |
Full details of the terms of the agreement and our charging rates are set out within the conditional fee agreement and the accompanying schedules. FAC |
For the avoidance of any doubt if you win your case I will be able to recover our disbursements, basic costs and the success fee from your opponent. FAC |
You are responsible for our fees and expenses only to the extent that these are recovered from the losing side. FAC |
This means that if you win, you pay nothing. FAC |
It is this last quoted passage that is said to make the retainer a CFA Lite, because of its evident intent to assure the client that he will not in any circumstances have to put his hand in his own pocket to pay his solicitors. FAC |
The RTA Protocol FAC |
This voluntary pre-action protocol came into force in 2010. FAC |
At the relevant time for present purposes it applied to claims for RTA personal injuries between 1,000 (which was the dividing line between the Fast Track and the Small Claims Track) and 10,000. FAC |
It has since been extended to higher value claims, up to 25,000, which corresponds with the boundary between the Fast Track and the Multi Track. FAC |
Current Government proposals to raise the Small Claims Track boundary to 5,000 for RTA cases may greatly affect its scope, since more that 90% by number of RTA cases are for damages below that level. FAC |
I can again take the summary of the relevant provisions of the RTA Protocol from the judgment of Lloyd Jones LJ in the Court of Appeal. Ratio |
The Protocol describes in great detail the behaviour the court will normally expect of parties, of their legal representatives and of the parties insurers, involved in such claims. Ratio |
Under the Protocol scheme parties, lawyers and insurers, when required to send information to one another, are expected to do so electronically through a website (the Portal) established by road accident insurers. Ratio |
While notice of claims falling within the Protocol is expected to be given in accordance with the procedures set out in the Protocol, they are not mandatory. Ratio |
However, there are possible costs consequences if qualifying claims are not processed in accordance with the Protocol. Ratio |
The preamble to the RTA Protocol states: 2.1 This Protocol describes the behaviour the court will normally expect of the parties prior to the start of proceedings where a claimant claims damages valued at no more than 10,000 as a result of a personal injury sustained by that person in a road traffic accident. FAC |
The aims of the Protocol are set out in paragraph 3.1. FAC |
3.1 The aim of this Protocol is to ensure that (1) the defendant pays damages and costs using the process set out in the Protocol without the need for the claimant to start proceedings; (2) damages are paid within a reasonable time; and (3) the claimants legal representative receives the fixed costs at the end of each ... |
Claims which no longer continue under the Protocol cannot subsequently re-enter the process. FAC |
(Paragraph 5.11) FAC |
The process is initiated by the completion of the Claim Notification Form (CNF). Ratio |
Paragraph 6.1 provides: 6.1 The claimant must complete and send - (1) the CNF to the defendants insurers; ... The RTA Protocol makes provision for response by the insurer as follows: 6.10 The defendant must send to the claimant an electronic acknowledgment the next day after receipt of the CNF; 6.11 The defendant must ... |
The Protocol makes provision for fixed costs to be paid at specified points. FAC |
Paragraph 6.18 makes provision for Stage 1 fixed costs. FAC |
6.18 Except where the claimant is a child, the defendant must pay the Stage 1 fixed costs in rule 45.29 where liability is admitted; or (1) liability is admitted and contributory negligence (2) is alleged only in relation to the claimants admitted failure to wear a seat belt, within ten days after sending the CNF respo... |
If the claim proceeds to Stage 2, the Protocol requires a Stage 2 Settlement Pack including a medical report to be sent to the defendant within 15 days of the claimant approving a final medical report and agreeing to rely on it. FAC |
(Paragraph 7.26). FAC |
There is a 35 day period for consideration of the Stage 2 Settlement Pack by the defendant (Paragraph 7.28). FAC |
Paragraph 7.37 provides: 7.37 Any offer to settle made at any stage by either party will automatically include, and cannot exclude - (1) (2) (3) the Stage 2 fixed costs in rule 45.29; an agreement in principle to pay disbursements; a success fee in accordance with rule 45.31(1). FAC |
Paragraph 7.40 provides in respect of Settlement: (1) 7.40 Except where the claimant is a child or paragraphs 7.41 and 7.42 apply, the defendant must pay - the agreed damages less any (a) deductible amount which is payable to the CRU; and (b) previous interim payment; any unpaid Stage 1 fixed costs in rule 45.29; the S... |
relevant disbursements allowed in Part 36 CPR - Offers to Settle, has been amended to take account of the Protocol. FAC |
Part 45 CPR, Fixed Costs, makes specific provision for costs under the Protocol scheme. FAC |
The Solicitors Equitable Lien: the Existing Law Ratio |
The earliest decision to recognise the equitable lien is Welsh v Hole (1779) 1 Dougl KB 238. PRE |
The plaintiff obtained judgment for 20 and costs in a civil claim for assault, but then compromised the claim for a direct payment by the defendant of 10. PRE |
There was no collusion to defeat the solicitors right to payment of his bill. PRE |
Lord Mansfield said this: An attorney has a lien on the money recovered by his client, for his bill of costs; if the money come to his hands, he may retain to the amount of his bill. PRE |
He may stop it in transit if he can lay hold of it. PRE |
If he apply to the Court, they will prevent its being paid over till his demand is satisfied. PRE |
I am inclined to go still farther, and to hold that, if the attorney give notice to the defendant not to pay till his bill should be discharged, a payment by the defendant after such notice would be in his own wrong, and like paying a debt which has been assigned, after notice. PRE |
But I think we cannot go beyond those limits. PRE |
There having been no notice in that case, the solicitors claim against the defendant failed. PRE |
It is implicit in Lord Mansfields reasoning that, if there had been notice to the defendant, he would have had to pay a second time, up to the amount of the solicitors bill. Ratio |
The typically terse judgment may be said to have dealt with legal and equitable lien without clearly distinguishing between the two, but the analogy of an assigned debt shows that Lord Mansfield recognised that the solicitor had an interest in the judgment debt which the court would protect, provided that notice of tha... |
An interest dependent upon notice is typical of an equitable interest. Ratio |
Confirmation that payment of the judgment debt to the claimant after notice of the solicitors interest exposed the payer to having to pay again was provided in Read v Dupper (1795) 6 Term Rep 361. PRE |
In that case the defendants solicitor paid the plaintiff direct, after notice of the plaintiffs solicitors interest, and had to pay again. PRE |
Lord Kenyon began: The principle by which this application is to be decided was settled long ago, namely that the party should not run away with the fruits of the cause without satisfying the legal demands of his attorney, by whose industry, and in many instances at whose expense, those fruits are obtained. PRE |
Lord Kenyon explained Lord Mansfields reference to assignment in Welsh v Hole in terms of equitable principle. PRE |
He said: according to the rules of equity and honest dealing if the assignee give notice to the debtor of such assignment, he shall not afterwards be suffered to avail himself of a payment to the principal in fraud of such notice. PRE |
In Ormerod v Tate (1801) 1 East 464 the fruits consisted of the debt arising from an arbitration award. PRE |
That appears to have been a case of collusion, because Lord Kenyon described the arrangement to pay the claimant direct as: no other than a mere shuffle between the plaintiff and defendant to cheat the attorney of his lien. PRE |
He described the extension of the principle to accommodate arbitration awards as justified by convenience, good sense and justice and recognised a public interest in the extension, to encourage litigants to use arbitration. PRE |
Two early cases demonstrate that access to justice lay behind the development of the principle. PRE |
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