Milton Keynes NHS Foundation Trust v Hyde

The absence of a formal discharge of a public funding certificate does not necessarily make a later private retainer unenforceable. The certificate is evidential, not invariably determinative. Where authorised funding has been exhausted, or is approaching exhaustion and further funding has been refused, a client and solicitor may enter a private retainer if this does not involve topping up or other abuse of public funding. The change in funding must be notified to the other parties. Any period of genuine concurrency prevents recovery for work done during that period, but does not ordinarily invalidate the entire private retainer. The court will require clear statutory language before treating a minor overlap as producing total unenforceability.

The Trust appealed against Master Rowley’s decision that Mrs Hyde could recover the costs of her clinical negligence claim under conditional fee agreements with her solicitors and counsel. Mrs Hyde had initially been publicly funded. The authorised costs limitation was increased to cover expert evidence, but the Legal Services Commission refused further funding. Her solicitors therefore entered into a conditional fee agreement and served notice of the new funding arrangement, without formally obtaining discharge of the public funding certificate.

The central issues were whether the undischarged certificate meant that the private retainer ran concurrently with public funding, whether such concurrency rendered the agreement wholly unenforceable, and whether the funding notice was effective.

1. Appeal dismissed. The conditional fee agreements were enforceable, subject to the statutory prohibition on recovering private costs for work carried out during any actual period of concurrent public funding.
2. Sections 10(1) and 22(2) of the Access to Justice Act 1999 are directed principally to protecting publicly funded clients from topping up and other abuse. They do not establish an absolute rule that a private retainer entered while a certificate remains formally undischarged is unenforceable.
3. The authorities, including Turner v Plasplugs Ltd [1996] 2 All ER 939, Littaur v Steggles Palmer [1986] 1 WLR 287, Burridge v Stafford [2000] 1 WLR 927 and Mohammadi v Shellpoint Trustees Ltd [2010] 1 All ER 433, demonstrate that formal discharge is merely evidential. A certificate may be treated as spent when authorised work is complete, and a client may cease to be treated as funded when the change in representation or funding is notified to the other side.
4. On the facts, the funding was approaching exhaustion, the Commission had refused further funding, and the necessary quantum work could not reasonably be completed within the available limit. There was no attempt to top up public funding. The position was therefore substantively equivalent to exhaustion of the authorised funds, although formal discharge would have been the correct procedural course.
5. The one-day interval between entering the conditional fee agreement and serving Form N251 was de minimis. Even if treated as concurrency, sections 10(1) and 22(2) would prevent recovery only for work performed during that overlap. Clear language, such as that found in section 58 of the Courts and Services Act 1990, would be required to produce total unenforceability.
6. The notice adequately identified the new conditional fee agreement and associated after-the-event policy. It was therefore effective.

• High Court (Queen’s Bench Division): appeal from Master Rowley’s decision dated 1 July 2015 dismissed. The decision that the conditional fee agreements were enforceable was upheld.