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Retainers and Busy Practitioners: The Case of Alina Budana v The Leeds Teaching Hospitals NHS Trust and The Law Society (as Intervener) - Amanda Stevens, Hudgell Solicitors

28/03/18. There is finally light at the end of the tunnel for the many firms who have attempted to transfer books of work out of their practice, to another, whilst seeking to retain rights to recover the costs of their own work pre-transfer under a CFA agreement.

A unanimous Court of Appeal published their decision in December 2017 to widespread applause, after intervention by the Law Society which estimated tens of thousands of cases would be affected by the outcome. The judgment was reminiscent of some of the finest of Lord Denning – the interpretation and adaptation of previously incomplete black letter law to meet the changing economic landscape of the personal injury market and give effect to the true intentions of the parties.

In brief, a personal injury law firm had decided they no longer wished to continue personal injury claims with the looming advent of pricing reform brought about by the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Bill on 1st April 2013 which would remove the recoverability of success fees and some ATE premiums from losing parties. Their book of work was sold to Hudgells Solicitors and a Master Deed was executed between the two businesses pre-LASPO and letters were sent by the vendor to all clients explaining Hudgells would look after the cases going forwards. Individual Deeds of Assignment were then executed post LASPO but stated to have retrospective effect. A back up CFA was also signed by Hudgells which was effectively “free standing” should there be any difficulty with transferring the rights under the earlier CFA so at least there would be an entitlement to some costs going forwards, albeit at a lower rate.

Mrs Budana, was one of the cohort of clients affected who confirmed she was happy to accept the transfer. Her case was concluded with a damages award fairly shortly afterwards. On assessment of costs a preliminary point arose as to the right to recover fees. The first firm had allegedly terminated their contract, so it was...

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