The fact that a client may not actually suffer major prejudice from a material breach of the old conditional fee agreement (CFA) rules does not mean the breach should be overlooked and the CFA found valid, the Senior Costs Judge said last month.

Peter Hurst 'respectfully disagreed' with Master Thomas Seager-Berry's decision last year in Ghannouchi v Houni that the validity of the CFA must be judged at the date of the detailed assessment. He indicated it should be when the CFA is made.


The Gazette's sister publication, Litigation Funding, reports this month that in Richards v Davis, Master Hurst said it was 'extremely regrettable' that the defendant insurer, Churchill, was still litigating compliance issues arising out of The Accident Group (TAG), which were settled by mediation. But he refused to strike out Churchill's challenge as it was not a party to the mediation.


However, he ruled that neither the TAG representative nor the solicitors - Manchester firm Rowe Cohen - had considered whether the client had before-the-event insurance. He also found a 'complete failure to consider any alternative funding, other than the TAG scheme'.


The judge was clear that the protection afforded to the client had been adversely affected, and accepted there was a materially adverse effect on the administration of justice when costs claims are unnecessarily inflated by excessive claims for after-the-event premiums.


Rowe Cohen partner Anthony Dennison said he was considering an appeal. He also suggested it would only affect cases involving insurers not involved in the TAG mediation.