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Giving Notice of Conditional Fee Agreements with a Success Fee - Nicholas Dobbs, Temple Garden Chambers

25/05/22. In EXN v East Lancashire Hospitals NHS Trust, the court considered the proper approach to the failure of a party to comply with the rules relating to notice that a claim is funded by a CFA with a success fee.

Since 1 April 2013, the recovery of success fees as costs has not been allowed. However, section 44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2021 retains provision for the recovery of success fees as costs in cases where the conditional fee agreement (CFA) was entered into before 1 April 2013. Paragraph 9.3 of the Practice Direction on Pre-Action Protocol in force at the relevant time required a party entering into such a funding arrangement to inform the other parties about this within a prescribed timeframe. CPR 44.3B(1) imposed a sanction on those who failed to provide funding information as required.

The Claimant was born in 2011 and suffered from severe cerebral palsy as a result of the Defendants’ negligence. Solicitors were instructed and a CFA entered into in March 2012. By letter in April 2012, the Claimant’s solicitors informed the First Defendant that the claim was “funded by way of a Conditional Fee Agreement”. The letter of claim was not sent until February 2018, but did satisfy the notice requirements of paragraph 9.3. It was promptly followed by a full admission of liability. Proceedings were then issued in October 2019 and settlement achieved in December 2020.

An issue subsequently arose as to the recoverability of the Claimant’s solicitors’ success fee, namely whether the Claimant’s solicitors had...

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