The defendant costs specialists

Article on CFA challenges

By on Apr 16, 2012 | 6 comments

Readers of Solicitors Journal will know I contribute a regular costs column. Somehow I usually manage to find something new to write about that hasn’t already appeared on the Legal Costs Blog. As part of our Costs Law Articles Archive project I will be uploading some of these old articles over the coming weeks. First up is a discussion of the Tankard v John Fredricks Plastics Ltd [2008] EWCA Civ 1375 judgment and whether it would kill off CFA challenges.

In the article I wrote:

“Although a collective sigh of relief will have gone up from panel members of the ALP scheme the decision has done little or nothing to limit the scope for challenges to other schemes or introduce any greater certainty. Hollins introduced the vague (and often shifting) concept of the ‘material’ breach and Tankard has introduced the even more unhelpful ‘reasonable person’ test. Although this appears to represent a common sense approach it actually produces nothing but uncertainty.

If you asked the ‘reasonable person’ whether he thought that a scheme that provided only 1% of a firm’s revenue might affect the advice it gave then the answer would probably be no. If you informed the same person that an interest amounted to £50,000 a year you would possibly get an entirely different answer. Of course, it is quite possible that 1% of a given firm’s revenue is indeed £50,000 a year. Would two judges give the same answer to this set of facts? Equally, £50,000 for some firms really would be irrelevant but for others would represent the difference between profit and loss. This new test will mean that there may have been a breach of the Regulations by one firm when advising a client but no breach by the firm next door giving exactly the same advice on the same scheme.”

Having recently had a CFA challenge upheld on appeal, and with one or two others still in the pipeline, I am sticking by the view that Tankard did not kill off CFA challenges but simply made the outcome more unpredictable.

    6 Comments

  1. guessing that there are not too many pre November 2005 CFA’s these days

    That said, those that remain are likely to be fairly large I would have thought

    annon

    16th April 2012

  2. nice to see that the technical challenges abhorred by the CoA in repeated cases, and the unecessary costs satellite litigation which has led to the Jackson reforms threatening to kill the costs industry, is still alvive and kicking, in Defendants whom still cannot realise the harm they have done to the profession; or maybe just dont care

    Anonymous

    16th April 2012

  3. “technical challenges abhorred by the CoA in repeated cases”

    Presumably a reference to the CoA judgments in Jones v Caradon Catnic Ltd, Garrett v Halton Borough Council and Myatt v National Coal Board.

    Simon Gibbs

    16th April 2012

  4. Again, why is it an issue for the Defendant to raise these issues if they apply? surely negligence not to? if there is nothing in it just raise, tick it off and drop the point

    However nothing wrong in asking the question. Its the Defendants job to do so

    The same as its teh Claimants job to chase interims, costs due at year end

    Am I the only one who thinks that ultimately Claimants and Defendants need each other??? without one there is not the other

    annon

    16th April 2012

  5. I have to say that I always found it funny to hear claimant solicitors frothing about the inquity of taking “technical points” against their client’s claim for costs, in cases where their client’s claim for damages had been founded on pages of allegations, in the particulars of claim, of technical breaches of various regulations concerning health and safety.

    Jacques Hughes

    18th April 2012

  6. just to clarify that I am “a claimant”

    I dont begrudge it when the Defendant asks the question, as long as they accept the answer if it appropriate and move on and doesnt just maintain for the sake of it

    if a defendant rings me on a meso and asks for the source of work eg nurse etc, then I respect that too and dont expect Wraith arguements

    As I said originally, ask the question, tick it off and then move on to the next issue if a satisfactory reply has been given

    Just dont see how you can take umbridge at that

    annon

    19th April 2012

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