I am grateful to Matthew Hoe from Taylor Rose TTKW for sending me a copy of the decision of HHJ Wulwik in Roman -v- AXA Insurance PLC (13/12/2018). Roman v AXA Insurance [2018] (1) The judge found that a CFA with a firm of solicitors did not continue when those solicitors ceased to act because their department was closing making it necessary for the claimant to instruct a second firm of solicitors.
THE CASE
The claimant was injured in an accident on the 7th May 2012. She entered into a conditional fee agreement with a firm of solicitors, Secure Law, which provided for a success fee of 100%. Secure Law issued proceedings on behalf of the claimant. However in November 2015 they wrote the claimant stating that her file would be transferred to another firm “Lime”. A notice of change of solicitors was given and the action eventually settled in the claimant’s favour.
THE ISSUE
The issue arose on detailed assessment as to whether claimant had elected to treat the conditional fee agreement with the first set of solicitors (Secure Law) as continuing after the claimant had entered into a new agreement with the second firm of solicitors (Lime). The practical significance of this was that if the original CFA continued then Secure Law were entitled to be paid for the work they had done. If the CFA did not continue then there was no obligation for payment and the defendant was not liable to pay the claimant.
THE DECISION AT FIRST INSTANCE
A Deputy Master held that the claimant had elected to treat the conditional fee agreement as continuing.
THE DEFENDANT’S SUCCESSFUL APPEAL TO THE CIRCUIT JUDGE
The defendant successfully appealed this decision. The judge considered the wording of the CFA, the rules and the relevant case law.
“The Present Case
17. The main point in this appeal is whether the Deputy Master was right in finding that the claimant, Mrs Roman, elected to treat the conditional fee agreement with Secure Law as continuing with the work to be done by Lime on the same terms as the original fee agreement with Secure Law. The defendant says that in this case the original conditional fee agreement was terminated by Secure Law’s conduct in no longer being willing to act for the claimant and by the claimant accepting that repudiatory conduct by entering into a new conditional fee agreement with Lime. The defendant says that unlike Budana, the original conditional fee agreement did not remain in place following the claimant’s instruction of the new firm.
18. The letter from Secure Law to the claimant proposed transferring the claimant’s claim to Lime, and that Lime would continue to act on her behalf and represent her “on the same basis as was agreed by Secure Law”. The letter from Lime to the claimant dated 10 November 2015, and which she signed on 11 November 2015, enclosed the copy letter from Secure Law. That letter indicated that Lime’s agents, Clear Visits Limited, would be visiting the claimant to go through the documents that the claimant would have to sign, those documents including a new conditional fee agreement with Lime which the agents would bring with them on their visit. The letter from Lime assured the claimant that they would continue to act on a no win, no fee basis and that their agreement with the claimant would be “on the same terms that you had with Secure Law Limited. Financially the outcome will be exactly the same”.
19. There are a number of points to be made:
i) The conditional fee agreement entered into by the claimant with Secure Law was clearly on the authorities an entire contract and was accepted to be an entire contract by the claimant.
ii) The letter from Secure Law sought to terminate the conditional fee agreement entered into by the claimant with Secure Law because Secure Law’s relevant department ceased to exist with the restructuring of their personal injury and clinical negligence teams. That was not a permitted circumstance for ending the conditional fee agreement under the Law Society document ‘What You Need to Know About a CFA’ so as to entitle Secure Law to payment. The letter from Secure Law to the claimant was a repudiatory breach of the conditional fee agreement entered into by the claimant with Secure Law.
iii) The letter from Secure Law to the claimant indicated that Lime’s agreement with the claimant would be “on the same basis as was agreed by Secure Law”, while the letter from Lime to the claimant stated that their agreement with the claimant would be “on the same terms that you had with Secure Law Limited”. Neither letter suggested that the conditional fee agreement entered into by the claimant with Secure Law would continue if the claimant’s case was transferred to Lime. On the contrary, the letter from Lime to the claimant made it clear that she would have to enter into a new conditional fee agreement with Lime before they could act for her.
iv) The claimant accepted the repudiatory breach of the conditional fee agreement entered into with Secure Law by proceeding to instruct Lime and entering into a new conditional fee agreement with Lime.
v) Unlike in Budana, the parties did not take any steps with a view to the conditional fee agreement entered into by the claimant with the first firm Secure Law continuing to subsist. There was no affirmation by the claimant of the conditional fee agreement with Secure Law, as there was in Budana by the second deed in that case and Ms Budana’s conduct more generally. As Gloster LJ said, the terms of the documentation in Budana clearly showed that Ms Budana did not elect to terminate her contract with the first firm of solicitors but instead decided to preserve and transfer it. That is not the position in the present case.
20. In my judgment, the Deputy Master was wrong to find that the claimant, Mrs Roman, elected to affirm the conditional fee agreement with Secure Law or that the claimant affirmed the conditional fee agreement by continuing with the claim with Lime on the same terms. The original conditional fee agreement with Secure Law did not continue to subsist.”
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