A large number of current CFAs with Counsel in personal injury cases are governed by the APIL/PIBA 6 model agreement. This provides:
“If the amount of damages and interest awarded by a court is less than a Part 36 payment into Court or effective Part 36 offer then:
1) if counsel advised its rejection he/she is entitled to normal and success fees for work up to receipt of the notice of Part 36 payment into Court or offer but only normal fees for subsequent work;
2) if counsel advised its acceptance he/she is entitled to normal and success fees for all work done.”
What costs are payable in the event Counsel was not advised a Part 36 had been made and the therefore did not advise one way or the other on the offer, which is subsequently not beaten?
On the face of it, there is a lacuna in the wording.
The problem should not arise, in theory, because the agreement, under the heading “Obligations of the Solicitor”, states the solicitor agrees:
“promptly to bring to counsel’s attention … any Part 36 or other offer to settle”
But what if the solicitor forgets?
The agreement states:
“Counsel may terminate the agreement if … Counsel discovers that the solicitor is in breach of any obligation [under “Obligations of the Solicitor]”.
In the event of termination in this situation the agreement provides:
“(1) If counsel terminates the agreement under paragraph 6 then, subject to sub-paragraph 2 hereof, counsel may elect either:
a) to receive payment of normal fees without a success fee which the solicitor shall pay not later than three months after termination: (“Option A”), or
b) to await the outcome of the case and receive payment of normal and success fees if it ends in success: (“Option B”).”
But, if the breach is not discovered until after the claim has settled, can Counsel still terminate the agreement?