Legal Cost Specialists

Willoughby v Sempra Energy Trading (UK) Ltd

The same issue as in Bevan and McFayden, although this time with the case being referred by Accident Assurance Limited, was considered in Willoughby v Sepra Energy Trading (UK) Ltd (Liverpool County Court, 5/4/07). District Judge Smedley, sitting as a Regional Costs Judge, found that there had been a breach of Regulation 4(2)(e)(ii) in that the solicitors had incorrectly stated that they did not have an interest in recommending the policy. The Claimant here did seek to run the de minimis argument on the basis that the referrals the solicitors received from this claims management company amounted to about 40 cases compared to the 300 cases they were receiving from another scheme. In addition the firm undertook private client work.

Although the judge accepted that the referrals represented only a small proportion of the firm’s work, and that half a dozen cases in a year would be insignificant, he calculated that the income generated by the 40 odd cases must have been in excess of £50,000 which could not be considered insignificant. On that basis the breach was material and the CFA was invalid.

The number of cases where this type of challenge continues to be available (claims where the old CFA Regulations apply) is reducing over time. However, the individual value of these cases is correspondingly increasing and the success that defendants have been achieving is likely to justify such challenges continuing for the foreseeable future.

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