The law firm that took on Barnetts’ personal injury book has failed to recover its costs in a personal injury claim, on the basis that the conditional fee agreement drawn up by Barnetts was not successfully assigned to it.
In Jones v Spire Healthcare (Case no. A13YJ811, 11.9.15) in Liverpool County Court, DJ Jenkinson held that the claimant was entitled to recover the costs incurred by Barnetts, but not those later incurred by SGI Legal, which bought Barnetts’ PI caseload when the firm went into administration last year.
The judge held that the CFA between Ms Jones and Barnetts had not been validly assigned to SGI, because according to established common law principles, the assignment of personal contracts was not possible. He found the case did not fall within the ‘narrow exception’ to this principle established in Jenkins v Young Bros Transport (2006) 1 WLR 3189, where the claimant had been ‘loyally following an individual solicitor’ to their new firm.
Although the CFA itself had not been assigned, DJ Jenkinson held that the ‘benefit of the retainer’ between Barnetts and Ms Jones had been validly assigned, which entitled the claimant to recover the earlier costs incurred by Barnetts.
However, the costs incurred by SGI could not be recovered, as there was ‘no enforceable retainer’ between that firm and the claimant. The judge found the agreement between SGI and the claimant to be a ‘novation’ rather than an assignment, meaning that it did not come into effect until January 2014.
That put it in breach of regulations introduced in 2013, because the agreement mentioned a 100% success fee without referring to the 25% statutory cap – although the wording had been valid when drawn up by Barnetts in 2012.
The judge said the claimant could ‘potentially’ recover disbursements incurred by SGI, but he had not heard submissions on this point.
It is understood that the decision is to be appealed.