The High Court has denied costs to a claimant firm that tried to switch funding methods in advance of the Jackson civil litigation reforms coming into force.

District Judge Besford said Irwin Mitchell was not entitled to additional liabilities coming to more than £105,000 after persuading a clinical negligence claimant to switch from legal aid funding to a conditional fee agreement in March 2013 – weeks before recoverability was abolished under the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO).

The defendant, the NHS Litigation Authority, sought to argue that the switch was unreasonable and the additional liabilities should be disallowed.

Besford agreed the decision was taken on ‘erroneous promises’ and that Irwin Mitchell had failed to show it was appropriate or necessary.

‘The solicitors have produced no evidence either by way of file notes, copy letters or even a witness statement from the client as to the advice tendered,’ said the judge. ‘In my judgment, the decision to switch was not self-evident or transparent.’

Besford said the claimant was ‘abandoning’ a 10% uplift on general damages, a sum of around £28,000, by accepting a CFA. This was done without being advised of the availability of the uplift.

In Yesil v Doncaster NHS Trust, Irwin Mitchell sought to argue that its failure to give material advice was not relevant to the consideration whether the decision to switch was reasonable.

But Besford said the client was entitled to have some understanding of their options, even if the firm advising them ‘leans’ a certain way.

‘It is inconceivable that a client would not consider the option of an additional 10% uplift on general damages a material factor,’ said Besford.

‘The omission to raise this factor, even if the claimant immediately rejected it, seriously calls into question the adequacy of the advice given.’

In a statement the NHSLA said it is increasingly contesting additional costs liabilities where clients switched funding methods prior to April 2013. This is the third time the authority has defeated a costs claim of this sort.

An NHSLA spokesman said: ‘It is disappointing that we continue to receive substantial bills for additional liabilities in these circumstances which means that it is necessary for us to challenge those bills at court.’

Irwin Mitchell said in a statement: ‘In a short timeframe we acted in the best interests of a specific group of clients in order to ensure they were able to pursue their claims to trial fully protected from any costs liabilities under a “no cost” pre-LASPO CFA.

‘This protected them from changes arising from LASPO and the vagaries and uncertainties of an increasingly complex and constrained legal aid system by ensuring their cases would be best placed to proceed under the new legal framework. We cannot comment on individual cases due to the ongoing appeals process.’

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