Top judge warns defendant PI firms to 'end costs war' or face rebuke by court

CONDITIONAL FEE AGREEMENTS: technical challenges must stop, says Lord Justice Brooke

The Court of Appeal has issued a final signal to defendant personal injury firms that they must stop bringing technical challenges to conditional fee agreements (CFAs) by threatening that if the 'nonsense' continues it 'may have to get people up here and warn them off'.

Ruling on the costs of the CFA test cases decided in May, the court heard evidence from claimant firms and the Law Society that defendant insurers represented by City firm DLA - which also acted for the insurers in four of the cases - had continued to bring technical challenges despite being told not to in the May ruling (see [2003] Gazette, 30 May, 3).

The court awarded costs against the defendants in two of the DLA cases, indemnity costs in another, and made no order as to costs in the one case where the defendants were successful.

The costs of the fifth of the test cases - relating to The Accident Group - were not dealt with in this hearing.

Expressing frustration at the evidence relating to technical challenges, Lord Justice Brooke said that the object of the court's judgment in May was 'to stop all this nonsense.' However, he accepted that it would take time for the message to filter down.

He concluded that if the situation continued, 'we may have to get people up here and warn them off'.

A Law Society spokeswoman said the May judgment gave a clear and practical method for assessing whether a challenge to a CFA was likely to succeed.

'The Society welcomes the robust approach of the court in discouraging further unmeritorious technical challenges,' she added.

Claimant practices involved in the case - Manchester firms Amelans and Colemans-CTTS, Liverpool-based Irvings, and the Stokes Partnership in Somerset - said they had rarely see a senior judge express himself in such forceful terms.

Colemans partner Greg Cox said: 'His anger was evident.

The clear message was that these challenges to CFAs are no longer to be tolerated and the "costs war" should be brought to an end.'

DLA associate Paul Dowle conceded that Lord Justice Brooke had expressed 'considerable concern' about paying parties seeking access through DLA to documents, demonstrating that the CFA regulations had been adhered to, even after a draft of the final judgment in Hollins had been circulated to all the parties in the CFA test cases.

'It is vital to understand that his comments were made in that context,' Mr Dowle argued.

He said DLA no longer sought documents demonstrating compliance with the regulations in detailed assessment proceedings.

Paula Rohan