It is hard to overstate the importance of today’s Court of Appeal ruling in Budana for the personal injury sector.
Thanks to the Jackson reforms we have seen tens of thousands of pre-Jackson claims being bought up by bigger firms. They were acquired on the basis that the success fee would be recoverable from losing defendants, and firms were very careful about the way the contracts were worded. But defendants still saw an unmissable chance to attack.
If this ruling had gone the other way, it would have involved a painful financial hit for many bulk PI providers, already facing a raft of other challenges. For defendants, it would have been a windfall gain.
It seems to me that the appeal judges were all too conscious of the real world implications of this ruling. They wanted to achieve what they regarded as a fair result, and they had to twist and turn the law itself in order to get there.
Lawyers sometimes wonder what the Law Society does for them. This case is a prime example of where it can make a real difference.
Lady Justice Gloster referred at some length to the evidence given by David Marshall, then chair of the Society’s Civil Justice Committee, about why there are perfectly legitimate reasons for PI cases to be assigned, and indeed why this has become an economic necessity. Judges can sometimes be a bit sniffy about the concept of cases being bought and sold between firms. But in Budana, the bench was helped to fully understand why so many smaller firms have simply had to transfer their cases. It accepted this as perfectly proper.
The judges all seemed to reach the same destination, but following different routes. It’s perhaps a shame that they couldn’t all agree on the reasoning. But they threw in some broad principles that will prove very helpful, for example regarding the fact that solicitors’ retainers are capable of assignment, particularly in bulk PI claims.
Given that the appeal was actually heard in July, and was leapfrogged to the CA on the basis that it was an important issue, this judgment was certainly a long time coming. Eyebrows were beginning to be raised at the delay, with speculation starting to grow as to what on earth was happening.
But today, for the claimant personal injury sector, the ruling was worth the wait.