Silvera v Bray Walker Solicitors (A Firm) & Ors

A conditional fee agreement is not rendered unenforceable by every breach of prescribed requirements. Under the Courts and Legal Services Act 1990, enforceability depends on whether the breach had a materially adverse effect on client protection or the proper administration of justice. A requirement that an agreement briefly specify reasons for a success fee may be satisfied by general wording where the surrounding explanations and circumstances enable the client to understand the agreement. Here, references to the risk of losing and to the solicitor earning nothing were sufficient, by a narrow margin, to satisfy the literal requirement. In any event, any deficiency was immaterial because the client had received the required information, understood the terms and had legal assistance. The appeal was dismissed.

The respondents obtained judgment for £351,000, interest and costs against the appellant under four conditional fee agreements relating to professional-negligence proceedings. The agreements stated that the reasons for the 75 per cent success fee were set out in a schedule, which referred generally to the risk of losing and to the solicitors earning nothing if the claim failed.

Mr Justice Blake held that the agreements complied with regulation 3(1)(a) of the Conditional Fee Agreements Regulations 2000. The appellant appealed that conclusion. Other proposed grounds were abandoned. The central issues were whether the agreements literally complied with the requirement to briefly specify the reasons for the success fee and, if not, whether any breach was material so as to affect enforceability.

1. Appeal dismissed. The court upheld the judgment for the respondents.
2. The statutory framework in section 58 of the Courts and Legal Services Act 1990 did not make every breach of a prescribed CFA requirement automatically fatal. Applying Hollins v Russell [2003] EWCA Civ 718, enforceability depended on whether the breach was material, in the sense of having a materially adverse effect on the protection afforded to the client or on the proper administration of justice.
3. The requirement in regulation 3(1)(a) of the Conditional Fee Agreements Regulations 2000 had two purposes: informing the client, and enabling a court later to assess the reasonableness of the success fee. The permitted brevity of the specification had to be assessed in context. The appellant was an experienced businessman, had received the information required by regulation 4, had the assistance of an informed lawyer and understood the agreements. By the narrowest margin, the general references in the schedules were sufficient to satisfy the literal requirement.
4. In any event, any literal deficiency was immaterial. The background explanations protected the client, and an omission of fuller reasons would principally have disadvantaged the solicitor in a later costs assessment. It had no materially adverse effect on client protection or the administration of justice in the circumstances.
5. The reasons required by regulation 3(1)(a) did not have to be reasons that would necessarily withstand a later assessment of the success fee. The separate objection to the blended 70 per cent fee was left in parenthesis because no success fee was claimed in the present proceedings.

• Court of Appeal (Civil Division): On 29 March 2010, dismissed the appeal.
• High Court, Queen’s Bench Division: On 18 December 2008, Mr Justice Blake gave judgment for the respondents in the sum of £351,000, together with interest and costs, for fees owing under the conditional fee agreements.