News focus: Law Society intervenes in the costs case of the century

The ability of lay clients to understand the Law Society’s model conditional fee agreement was questioned by three of the most senior judges in England and Wales last week in a much-awaited Court of Appeal hearing.

In Belsner v Cam Legal Services, master of the rolls Sir Geoffrey Vos, the chancellor of the High Court Sir Julian Flaux and Lord Justice Nugee are hearing an appeal to decide whether the client in a low-value RTA claim gave informed consent to a deduction of unrecovered costs from her compensation from a motorcycle accident. Her case is one of those taken up by costs challenge specialist checkmylegalfees.com. Norfolk firm CAM Legal Services is contesting the claim, for £385.50.  

Court 71 of the Royal Courts of Justice heard that it was ‘ridiculous’ for the case to have reached the High Court and Court of Appeal. For the Law Society, which is intervening in the appeal, David Holland KC pointed to a ‘complete lack of evidence’ that the client had been aggrieved by the reduction. ‘There is no evidence that the client made any complaint about the solicitors who had fought and won the case, no evidence that they had used formal [complaint] procedures.’ Likewise there was no evidence that she had gone to the legal ombudsman.

The only reason the case had come to court was because ‘someone came up with a clever wheeze’, Holland said. ‘The [Law] Society would say that in any other sort of claim this would be condemned as disproportionate.’ However the master of the rolls said the client had been entitled to bring the High Court claim. ‘Just saying it’s ridiculous doesn’t get you very far.’ Belsner herself has been indemnified against any costs implications of the hearing, the court heard.

'We have to be quite careful, particularly when there are hundreds of thousands of such cases, not to make solicitors’ lives impossible, or indeed make clients’ lives impossible'

Sir Geoffrey Vos, master of the rolls

Tuesday afternoon’s hearing centred largely on whether client communications – such as the 47-page document sent to Belsner – were understandable by lay people and whether solicitors have a duty to explain them in detail. The judges heard that radical changes to the personal injury market had made it unrealistic for individual clients to receive a phone call ‘let alone a face-to-face meeting’.

‘This is very significant, isn’t it?’ Vos observed, citing the code of conduct requirement for solicitors to ensure clients are given ‘information in a way they can understand’, are in a position to make informed decisions and that they receive ‘the best possible information’ about pricing. ‘You are not saying that it is not a breach of the provision to send a 47-page mass of information?’

Holland responded: ‘It’s not the case that the solicitor should have rung up Ms Belsner and proceeded to explain [every provision].’

‘It is very difficult to say she did get the “best possible” information,’ Nugee added.

‘Then why didn’t she raise a complaint?’ Holland responded. ‘There is no breach, in my submission, if they sent the agreement and said “If there are any questions, phone”.’

Vos continued that ‘it does seem odd that it is OK to send a raft of impenetrable documents to someone who has a small claim as a result of falling off the back of a motorcycle.’

‘We have to decide whether it is appropriate or not,’ Flaux observed, saying that if solicitors’ practices have to change ‘then so be it’.

Holland defended the Law Society’s 22-page model conditional fee agreement, citing the difficulty of combining brevity and comprehensibility while ticking all regulatory and statutory boxes. ‘The Society would say that if you sat down and read its CFA, it is comprehensible, because it is meant to be read by lay people.’

‘I actually don’t believe that 22 pages is concise… call me eccentric if you like,’ Vos interjected.

The document, which is currently suspended pending the outcome of the case, had won a plain English award, the court heard. Holland responded that ‘any comments made by this court will be closely examined by the Society and incorporated in [future] guidance’.

However Vos suggested that the court’s judgment would not be prescriptive. ‘We can say what’s wrong, but it’s very much harder to say what’s right,’ he said. ‘We have to be quite careful, particularly when there are hundreds of thousands of such cases, not to make solicitors’ lives impossible, or indeed make clients’ lives impossible.’

Judgment – which Vos said could not be guaranteed to run to fewer than 22 pages – was reserved.