Breach of contract – Conditional fee arrangements – Costs – Retainers

(1) Bray Walker Solicitors (a firm) (2) Bevans Bray Walkers Ltd (t/a Bevans) v Carlo Moise Silvera: QBD (Mr Justice Blake): 18 December 2008

The claimant solicitors (B) sought payment of their basic costs incurred when they acted as solicitors for the defendant (S).

S had brought proceedings for negligence and breach of contract against his former legal advisors. B acted for S in those proceedings over a period of four years pursuant to a number of conditional fee agreements. The CFAs remained unpaid and B issued proceedings for payment. S disputed liability on the basis of breaches of the regulations governing the CFAs and by B of the terms of the retainer and CFA under which they were retained. The parties disputed the terms of the CFAs. S submitted that B had breached the Conditional Fee Agreements Regulations 2000 as they had failed to properly explain to S the effect of the CFA and how it could be brought to an end. S further claimed that B had failed to explore insurance cover.

Held: There was no evidence before the court of breach of contract disentitling B to their fees. Fees could not be recovered under a CFA unless there had been substantial compliance with the duties set out in the regulations. On the evidence there had been no breach of the regulations. There was no reason to believe that the costs of the litigation could be met under an existing contract of insurance. If the client or the context suggested that the litigation costs might be covered by a pre-existing policy of insurance then there was a clear duty to investigate the matter with appropriate scrutiny. It did not require detailed inquiry into something that there was good reason to believe not to exist. B had not been in breach by not looking into the question of insurance as there was no basis for any belief that an existing contract of insurance might have covered the risk. B had satisfied the court on the evidence that they had made out their claim for the recovery of their basic fees due under the contract set out in the CFAs. S had failed to satisfy the court that the contract was unenforceable by reason of non-compliance with the regulations or any other pleaded reason.

Judgment for claimants.

Nicholas Bacon (instructed by Bevans) for the claimant; Paul Staddon, Andrew Post (instructed by Jeffrey Green Russell) for the defendant.