A London commercial firm will ask the Supreme Court to develop the common law of champerty after an appeal over the assignment of its now-deceased client’s claim was dismissed.

Candey said it intends to seek permission to appeal to the UK’s highest court after the Court of Appeal confirmed that ‘a solicitor acting for a client in legal proceedings may not validly take an assignment of the client’s cause of action prior to judgment’.

The firm had urged the court to ‘make new law and remove the medieval shackles of champerty from legitimate solicitor-client agreements’, arguing that assignments which do not ‘enlarge the benefit’ solicitors would otherwise receive should not be considered champertous.

Muhammed Haque QC, for Candey, told the Court of Appeal that the introduction of damages-based agreements and conditional fee agreements through the Courts and Legal Services Act 1990, and the growth of litigation funding, means that ‘lawyers are now as much commercial parties in litigation as they are officers of the court’.

However, the firm’s appeal was unanimously rejected by the Court of Appeal which rejected the argument that it was ‘no longer contrary to public policy’ to prevent assignments of claims from a client to their solicitors.

Lord Justice Arnold held that court was ‘bound by previous decisions … that a champertous agreement not sanctioned by the 1990 act remains contrary to public policy and is therefore unenforceable’.

But Richard Singleton, a partner at Candey, told the Gazette this week that considering assignments solicitors to be champertous ‘serves only to dissuade lawyers from acting for meritorious parties who are short of cash’.

‘We believe that society must ensure access to justice to all and, in the absence of state funding, market principles must be in play,’ he said. ‘For a lawyer to spend its own money on a contingency but to deny them their commercial rights is akin to asking a bank to lend money without taking any security. It’s simply unreal and uncommercial.’

He said the law of champerty was intended to ‘protect clients from unscrupulous lawyers’, adding: ‘As solicitors, we are possibly one of the most highly-regulated sectors, we have plenty of regulations and compliance issues to deal with.

‘It is simply not the case now that the public needs protecting from unscrupulous solicitors. It seems absurd really that a third-party funder can come in and take an assignment of a claim whereas the solicitors cannot.’

 

This article is now closed for comment.