Andrew Hurley v Tawanda Makuni – County Court Judgment which is expected to run to the COA (heard on 30/11/12)

The case concerned the recoverability of costs in CFA funded cases. The issue was the extent to which the Cancellation of Contracts made in a Consumers Home or Place of Work, etc Regulations 2008 apply to CFAs and whether a failure to contain notice of the claimant’s right to cancel a CFA renders the agreement unenforceable.

The claim itself was a RTA claim in which damages were settled for £2,634.97 on the basis of a consent order. The Claimant served a Bill of Costs totalling just over £8,000.

The Defendant argued that no costs were recoverable by reason of the failure by the claimant’s solicitor to give their client notice of his right to cancel the CFA agreement as required by the Cancellation of Contracts Regs. The Defendant argued that on this basis the CFA was unenforceable as between the Claimant and the claimant’s solicitor and therefore they have no liability to pay any costs whatsoever.

The Claimant tried to argue that the CFA was an ‘Excepted Contract’ within schedule 3 of the 2008 Regulations which excludes contracts under which total payment to be made by the consumer, in this case the claimant, do not exceed £35.

They argued that technically there would be no payments at all by the claimant to his solicitor because all payments were to be made by the unsuccessful defendant.

Alternatively, the claimant sought to argue that the CFA was a ‘CFA lite’ which is exempt from consumer protection regulation.

A CFA Lite limits the Claimant’s liability for his solicitors’ costs to those recovered ‘by way of costs or otherwise’ from the Defendant.

The Claimant accepted that the CFA had been completed in the Claimant’s home and that no written notice of the right to cancel had been given to him.

The Claimant’s solicitor also accepted that but for the provision that they would only charge for fees and expenses actually recovered, the CFA WOULD be caught by the 2008 Regulations. (In other words, if the solicitors had retained the right to charge their client more than they recovered the CFA WOULD NOT fall with the excepted list of contracts.)

The Judge held:-

  • that the CFA between the claimant and his solicitors is one to which the 2008 Regs apply
  • there had been no written notice of the right to cancel
  • the charge to the claimant is the amount to be recovered from the paying party
  • although it was obviously not quantifiable at the time of entering into the CFA this charge would plainly exceed £35
  • as such, the agreement was not enforceable as between the claimant and his solicitors
  • therefore the Claimant was not entitled to recover his costs from the Defendant, the Bill was assessed at nil.  

Needless to say the Claimant is expected to appeal.