CCFAs 'not exempt' from the indemnity principle

COSTS JUDGE: first court ruling on collective agreements

Collective conditional fee agreement (CCFAs) are subject to the indemnity principle, a costs judge has decided for what is thought to be the first time.

In Gliddon v Lloyd Maunder Limited, Mr Gliddon - represented by Clarke Wilmott & Clarke under a CCFA with the Transport & General Workers Union - won his case against his former employer, subject to his contributory negligence, after he was injured at an abattoir.

The Supreme Courts Cost Office is just deciding whether the firm should receive its success fee because the initial work was done before the CCFA came into effect.

Mr Gliddon's counsel, Nicholas Bacon of 1 Temple Gardens, argued among other things that the success fee should be recoverable because CCFAs are not subject to the indemnity principle following the implementation of the CCFA Regulations in November 2000.

Mr Bacon argued that government response to a consultation paper on the regulations showed that it had not intended the principle to apply to CCFAs.

But Costs Master O'Hare held that, although statutory exceptions to the indemnity principle do exist, there is no inherent exception to the indemnity principle in CCFAs.

Andrew Parker, partner at City firm Beachcroft Wansbroughs and former president of the Forum for Insurance Lawyers, said he believed this was the first time it has been established in court that CCFAs are not exempted from the indemnity principle.

Barrister Gordon Wignall, who co-wrote the Law Society's guide to CFAs, said: 'This shows the indemnity principle is alive and well.'

Mark Thompson, a partner with the Plymouth office of Bond Pearce who is acting for the claimants, said: 'This is the first time it has been decided at this judicial level.

Some people think that just because the indemnity principle still applies, CCFAs cannot exist at the moment, which is not right.'

The case continues.

Jeremy Fleming