Firms can delegate CFA role, Hurst rules

Solicitors can validly delegate outside their firms the responsibility to explain conditional fee agreements (CFAs) to clients, the senior costs judge ruled last week, but the key issue is the quality of the explanation provided.

In a preliminary ruling on The Accident Group (TAG) test cases, Chief Master Peter Hurst said: 'The law relating to delegation and agency does not restrict the class of person to whom tasks may be delegated, but the principal will be vicariously liable for the delegate's failures.'

However, he added that in the event he was wrong, and the CFA Regulations 2000 have not been complied with, the CFA would be unenforceable.

'If Parliament has laid down that a CFA shall be unenforceable if it does not comply with the requirements laid down by the Lord Chancellor, it is not for the court to try and find a way round that sanction,' he said.

The insurers are to appeal on the delegation issue, while TAG will cross-appeal on the enforceability point.

If expedited as recommended, the appeals could be heard next March or April.

Costs were awarded to TAG, advised by Manchester firm Rowe Cohen.

The decision follows the county court ruling in English v Clipson, in which a district judge ruled that the TAG representative who provided key information to the client under regulation 4 of the CFA Regulations 2000 was not an agent of the solicitor and so did not constitute the legal representative required for the task.

However, Master Hurst stressed that he was not, at this stage, ruling on the adequacy of the information provided by the TAG representative, which he said was the essential question.

The quality issue and the other challenges to the TAG scheme will be heard in March.

Around 211,000 cases await determination of the test cases.

Rowe Cohen partner Anthony Dennison called on insurers to be pragmatic and start paying up.

He warned that taking the quality of advice issue to its logical conclusion would mean investigating the information given in every single case.

Nick White, a partner of Beachcroft Wansbroughs, acting for one of the defendants, said he welcomed 'Master Hurst's clarification of the effect of any breach of the CFA Regulations'.

However, he said they would appeal the delegation point because 'it is a general feeling that it is wrong' to allow non-lawyers to provide advice that Parliament said needs to be given.

Neil Rose