Conditional fee agreements - claimant's legal costs funded by trade union pursuant to collective conditional fee agreement - claimant legally liable to pay success fee - success fee recoverable from defendant

Thornley v Lang: [2003] EWCA Civ 1484: CA (Lord Phillips of Worth Matravers, Master of the Rolls, Lord Justice Mummery and Lord Justice Tuckey): 29 October 2003

The claimant bus driver and trade union member claimed damages from the defendant for personal injuries sustained in a road accident.

The parties reached a compromise.

The defendant's insurers conducted the litigation on his behalf while the claimant's legal costs were paid by his union pursuant to a collective conditional fee agreement, under which they agreed to pay a 20% success fee.

The defendant's insurers accepted their liability to pay the claimant's costs apart from the 20% success fee, contending that the claimant had incurred no liability to pay that fee to his solicitors and therefore had no right to recover it as part of his costs.

The judge awarded the claimant his costs including the success fee.

The defendant appealed.

Ian McLaren QC (instructed by DLA, Manchester) for the defendant.

Anna Guggenheim QC and Philip Kramer (instructed by Browell Smith & Co, Newcastle upon Tyne) for the claimant.

Held, dismissing the appeal, that the regulations governing conditional fee agreements and collective conditional fee agreements were mutually exclusive; that therefore where litigation was funded under a collective conditional fee agreement no obligation arose to comply with the more exacting requirements of the Conditional Fee Agreements Regulations 2000; that where a third party funded a claimant's litigation under the terms of a valid collective conditional fee agreement the claimant was under a legal obligation to pay the costs incurred under that agreement, and therefore he could recover the costs from the defendant without infringing the indemnity principle.