Engeham v London & Quadrant Housing Trust & Anor

A conditional fee agreement must be construed by separating the costs covered by the agreement from the event which triggers liability to pay them.

Where a CFA defines a win by reference to an agreement finally deciding the claim in the claimant’s favour, the clause does not require the defendant named in the agreement to pay the damages. Payment by another defendant or a third party may qualify, provided the settlement finally resolves the claim and benefits the claimant. The claimant remains entitled to recover only costs falling within the CFA’s defined scope.

Ms Linda Engeham brought a personal injury claim after a ceiling collapsed in her rented flat. She initially entered into a CFA concerning her claim against London & Quadrant Housing Trust. Investigations later identified Academy of Plumbing Ltd as a potential additional defendant, and proceedings were issued against both.

The claim was compromised by a Tomlin order. Ms Engeham accepted £10,000 plus costs in full and final settlement, with the damages to be paid by Academy of Plumbing Ltd. A costs officer and Master Haworth concluded that this was not a win under the CFA. The Central London County Court held otherwise and awarded the costs relating to the claim against London & Quadrant. The issue on appeal was whether payment by a defendant other than the one named in the CFA prevented the settlement from satisfying the win clause.

1. Appeal dismissed. The CFA was limited to Ms Engeham’s claim against London & Quadrant because the agreement expressly identified that claim. She could therefore recover only costs relating to pursuing that defendant. This conclusion was common ground on the appeal.
2. The scope of the CFA had to be distinguished from the event triggering liability for the contractual costs. The win clause required the claim to be finally decided in the claimant’s favour by an agreement to pay damages, or by another benefit derived from pursuing the claim. It did not require the defendant being sued to be the person who actually paid the damages.
3. A settlement may involve payment by another defendant, a parent or related company, a shareholder, or a third-party well-wisher. The payer’s identity was therefore irrelevant where the settlement finally resolved the claim and provided the claimant with the benefit sought.
4. The Tomlin order had the necessary finality and constituted an agreement to pay damages. The fact that Academy of Plumbing Ltd, rather than London & Quadrant, was to make the payment did not prevent a win against London & Quadrant. The claimant was accordingly entitled to the costs of that part of the action.
5. The concern that the CFA might impose liability for costs relating to other parties confused the agreement’s scope with its win clause. Costs relating to claims outside the CFA remained unrecoverable.

Lord Justice Simon and the Master of the Rolls agreed with Lord Justice Floyd. Order: appeal dismissed.

1. Court of Appeal (Civil Division): On [2015] EWCA Civ 1530, dismissed Academy of Plumbing Ltd’s second appeal.
2. Central London County Court: On 14 July 2014, His Honour Judge Mitchell, sitting with Master Hurst, held that the settlement was a win under the CFA and awarded Ms Engeham the costs relating to her claim against London & Quadrant.
3. Costs assessment: Principal Costs Officer Lambert and, on appeal, Master Haworth had held that the settlement did not constitute a win.