Two top law firms have become embroiled in a costs row after one accused the other of fraud over backdated conditional fee agreements (CFAs).

The dispute arose last month at a costs hearing held by Master O'Hare in relation to a group nuisance action that involved more than 200 claimants.

Defendant firm Nabarro Nathanson alleged that in most cases, the CFAs issued by claimant firm Hugh James partner Gareth Morgan had been backdated and amounted to forgeries.

The use of the CFAs in claiming costs amounted to an attempt to defraud the defendants, it said.

In a witness statement prepared for the hearing, Mr Morgan openly accepted that the CFAs were not signed on the dates stated.

Initial instructions were taken on the basis that they would be funded by legal aid or a CFA if not available.

This was the case, and so CFAs were entered into to cover the entire duration of the case from instruction, he said, insisting they are enforceable and valid in law.

Nabarros asked the Master to refer its fraud allegations - which had been explicity raised for the first time before him - to the High Court.

But the Master said his powers to act were sufficient and that the defendant should launch a separate action against Hugh James if it wanted to bring the allegation to the attention of a High Court judge.

A Hugh James spokesman said the firm 'vehemently denied' the fraud allegations, but was unable to comment further for legal reasons.

Paula Rohan