Interim model CFA held unenforceable by judge after latest DLA costs challenge

BREACH: agreement failed to specify whether all costs are limited by reference to damages

A circuit judge in Oldham ruled last week that the Law Society's interim model conditional fee agreement (CFA) from 2000 is unenforcable.

In Hollins v Russell, the latest technical challenge brought by City firm DLA, the court found that it breached regulation 2(1)(d) of the CFA Regulations 2000 for failing to specify whether all costs - rather than just the success fee - were limited by reference to damages.

The current version of the model CFA - which was introduced in July 2000 - specifies all costs and has not been challenged.

While the interim model was only in effect from April 2000 - when recoverability was introduced - to July, it is thought that many firms continued to use it for far longer.

The CFA in question, signed by Oldham firm Gruber Garratt, was dated 9 January 2001.

Partner Tony Machowski said the firm had used the interim model because it was the one contained in the Accident Line operating manual and was not changed until October 2001.

The manual is updated annually.

David Hartley, director of Accident Line services, said that while the interim CFA was in the 2000 manual because of printing deadlines, panel solicitors 'were required to have a CFA which complied with the regulation and with the Law Society model as varied from time to time'.

The Law Society intervened in Hollins before the circuit judge, and is now urgently considering its next move.

A spokesman said: 'This decision is not binding.

It is very disappointing that the circuit judge found that the agreement did not meet the requirements of the regulations.

This will no doubt cause dismay to solicitors who have used this version.

However, it should be emphasised that this is not the current version recommended since July 2000.'

The same point was taken at Middlesbrough County Court in July in Barnard v Milburn and succeeded before a district judge.

An appeal to a circuit judge is still pending.

Neil Rose