Gaynor v Central West London Buses Ltd.

A conditional fee agreement exists only where the conditional payment term concerns fees or expenses for advocacy or litigation services. A conditional waiver of fees for limited pre-litigation work is therefore insufficient.

Proceedings are “contemplated” for this purpose only where there is at least a real likelihood that they will be issued. Before a potential defendant disputes the claim, preliminary advice on whether a client has a prima facie case and the sending of a letter of claim do not amount to litigation services.

The claimant obtained damages following an accident involving the defendant’s buses. During the ensuing assessment of costs, the defendant argued that the solicitors’ retainer was an unenforceable conditional fee agreement because it did not comply with the applicable statutory conditions.

The costs judge rejected that argument, but His Honour Judge Platt allowed the defendant’s appeal in the Romford County Court. The claimant appealed to the Court of Appeal. The central issue was whether a promise to waive charges for work already undertaken if the claimant decided not to pursue disputed proceedings made the retainer a conditional fee agreement within section 58(2)(a) of the Courts and Legal Services Act 1990.

1. The appeal was allowed unanimously. Lord Justice Dyson delivered the judgment, with which Sir Martin Nourse and Lord Justice Auld agreed. The retainer was not, and did not evidence, a conditional fee agreement.

2. Section 58(2)(a) of the Courts and Legal Services Act 1990 concerns an agreement under which fees or expenses for advocacy or litigation services are payable only in specified circumstances. A term addressing payment for services outside those categories is irrelevant to whether the agreement is a conditional fee agreement. This construction accords with the statutory purpose of protecting clients who receive advocacy or litigation services, as recognised in Hollins v Russell [2003] EWCA Civ 718.

3. Whether the work covered by the waiver was litigation work depended on the proper construction of the retainer. It did not depend on the work actually performed or on whether the claimant ultimately decided to pursue proceedings. Read as a whole, the letter required any decision attracting the waiver to be made before proceedings were issued. The waiver therefore covered only modest pre-litigation services.

4. “Contemplated proceedings” within section 119(1) are proceedings which have at least a real likelihood of being issued. Until the potential defendant disputes the claim, proceedings cannot be described as contemplated. Advising whether a client has a good prima facie case and sending a letter of claim are insufficient to constitute litigation services.

5. The statutory protections governing conditional fee agreements were not intended to apply to an agreement providing only limited preliminary services without charge if the client elected not to litigate. The county court judge’s conclusion that the retainer was an unenforceable conditional fee agreement was accordingly reversed.

1. Court of Appeal (Civil Division): The claimant’s appeal was allowed unanimously. The court held that the retainer was not a conditional fee agreement within section 58(2)(a) of the Courts and Legal Services Act 1990.

2. Romford County Court: His Honour Judge Platt allowed the defendant’s appeal from the costs judge. He held that the retainer was a conditional fee agreement and was unenforceable because it did not satisfy the statutory conditions.

3. Detailed assessment: Master Berry held that the retainer was not intended to create a conditional fee agreement.