In a successful appeal by the Claimant, Liverpool County Court
recently found that the assignment of a CFA, when the first firm
ceased to practice, was valid. The decision overturned the first
instance ruling that the CFA had not been validly assigned.
The Circuit Judge's ruling was based on the principle laid
down in Jenkins v Young Brothers Transport Ltd  EWHC 151, and
took this to be wider authority that the benefit and the burden of
a CFA can be validly assigned between firms. The Judge felt bound
by this case, although only a county court decision. This widened
the position that valid assignment is not restricted to
circumstances where the transfer is as a result of the claimant
following their solicitor to their new firm.
Although the Defendant will not be appealing the decision,
another possible test case in relation to CFAs has emerged.
(2) Budana v Leeds Teaching
Hospitals NHS Trust
Permission for the Claimant to appeal has been granted, where it
was found that the retainer, including a CFA, was terminated
pre-assignment. The Defendant in this case, who is cross-appealing,
has asked for the case to be leapfrogged and it may therefore be
heard by the Court of Appeal.
At first instance, it was held that the retainer was terminated
when the original firm (Baker Rees) told its client it was no
longer conducting personal injury work and therefore before the CFA
could be assigned to firm Neil Hudgell. As a result, there was no
valid CFA to be transferred. Nevertheless, a second CFA which was
subsequently entered into with Neil Hudgell, on the basis that it
would only apply if there was a problem with assignment of the
first CFA, was found to be valid. The Claimant was awarded Neil
Hudgell's base fees, disbursements and VAT, but not the costs
of Baker Rees.
An appeal is eagerly awaited given that the Judge saw "much
force" in defending counsel's criticisms.
(3) Implications for
Given that the principles on the assignment of pre-Jackson CFAs
are based on county court authorities, a Court of Appeal decision
on the issue is likely to be welcomed by all parties, to provide
clarity and guidance for the large number of cases waiting in the
wings. This is particularly so, given the likely number of
applicable cases; large numbers of CFAs entered into before the
reforms have since been sold on to larger firms, as the market has
The issue is particularly significant for defendants as a valid
CFA assignment will mean a success fee is recoverable from the
In the United Kingdom, when victims of life-changing personal injuries accept lump sum compensation payments, the actual amount they are awarded by English Courts is adjusted according to the interest that they can expect to earn by investing the award.
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