1. Jones v Spire Healthcare Ltd

In a successful appeal by the Claimant, Liverpool County Court recently found that the assignment of a CFA, when the first firm ceased to practice, was valid. The decision overturned the first instance ruling that the CFA had not been validly assigned.

The Circuit Judge's ruling was based on the principle laid down in Jenkins v Young Brothers Transport Ltd [2006] EWHC 151, and took this to be wider authority that the benefit and the burden of a CFA can be validly assigned between firms. The Judge felt bound by this case, although only a county court decision. This widened the position that valid assignment is not restricted to circumstances where the transfer is as a result of the claimant following their solicitor to their new firm.

Although the Defendant will not be appealing the decision, another possible test case in relation to CFAs has emerged.

  1. Budana v Leeds Teaching Hospitals NHS Trust

Permission for the Claimant to appeal has been granted, where it was found that the retainer, including a CFA, was terminated pre-assignment. The Defendant in this case, who is cross-appealing, has asked for the case to be leapfrogged and it may therefore be heard by the Court of Appeal.

At first instance, it was held that the retainer was terminated when the original firm (Baker Rees) told its client it was no longer conducting personal injury work and therefore before the CFA could be assigned to firm Neil Hudgell. As a result, there was no valid CFA to be transferred. Nevertheless, a second CFA which was subsequently entered into with Neil Hudgell, on the basis that it would only apply if there was a problem with assignment of the first CFA, was found to be valid. The Claimant was awarded Neil Hudgell’s base fees, disbursements and VAT, but not the costs of Baker Rees.

An appeal is eagerly awaited given that the Judge saw "much force" in defending counsel's criticisms.

  1. Implications for defendants

Given that the principles on the assignment of pre-Jackson CFAs are based on county court authorities, a Court of Appeal decision on the issue is likely to be welcomed by all parties, to provide clarity and guidance for the large number of cases waiting in the wings. This is particularly so, given the likely number of applicable cases; large numbers of CFAs entered into before the reforms have since been sold on to larger firms, as the market has consolidated.

The issue is particularly significant for defendants as a valid CFA assignment will mean a success fee is recoverable from the defendant.