Idiot-proof CFAs – tested to destruction by idiots
Since the CFA Regulations 2000 were revoked, on 1st November 2005, it should now be virtually impossible to enter into a defective CFA. Generally the only requirements for a CFA to be valid are that it is in writing and the success fee does not exceed 100%.
GWS were recently instructed to advise in relation to a claim funded by a post-November 2005 CFA. The agreement followed standard wording but the space in the document where the amount of the success fee was to be inserted had been left blank. Notwithstanding this, the Claimant’s solicitors initially claimed a success fee of 25%, this being an EL claim to which fixed success fees apply. The Claimant’s solicitors conceded the success fee at an early stage but maintained the claim for the balance of their costs.
GWS advised the Defendant that the CFA was defective because it is a requirement of s58(4)(b) of the Courts and Legal Services Act 1990 for a CFA which provides for a success fee to state the level of the success fee. It was clear from the CFA in question that it was indeed intended to provide for a success fee, but that amount had simply not been inserted. GWS drafted a detailed skeleton argument in support of the argument that the CFA was invalid and this was served on the other side. In due course the Claimant’s solicitors conceded that the CFA was indeed defective and dropped their claim for costs entirely.
Clearly the new CFA regime is still too onerous for some claimant lawyers. How soon before we hear demands for further simplification? Quite how much more simple it can get is hard to see.