Warren v Hill Dickinson LLP

A conditional fee agreement remains capable of transfer between law firms, including where the original firm ceases to practise. A firm’s inability or unwillingness to continue acting does not itself terminate the agreement. Even a repudiatory breach leaves the agreement subsisting unless the innocent party accepts the breach and elects to terminate it. Novation of a conditional fee agreement requires the client’s fully informed consent. Where the client understands the available options and the consequences of transfer, consent may be established by the evidence and subsequent conduct. A transfer may therefore be effective despite the original firm’s cessation of practice, particularly where the client continues with the chosen solicitor and receives the benefit of the existing agreement.

Frank Warren appealed from Master Leonard’s decision on preliminary issues concerning conditional fee agreements originally made with PSB Law LLP and purportedly transferred to Hill Dickinson LLP. The master held that the agreements had been validly transferred and that the underlying proceedings had been successfully concluded. The appeal concerned only the transfer issue.

Mr Warren argued that PSB Law’s cessation of practice made the agreements incapable of assignment or novation, that the agreements had been terminated, and that he had not given fully informed consent. The central questions were whether cessation of practice prevented transfer and whether the evidence established informed consent.

1. Permission refused. The proposed appeal had no real prospect of success and there was no other compelling reason for it to be heard.
2. The proper analysis was novation rather than assignment, following Budana v Leeds Teaching Hospital NHS Trust [2017] EWCA Civ 1890. The distinction did not affect the result unless it could properly be argued that no novation had occurred.
3. The conditional fee agreements remained capable of transfer. The analogy with Cutter v Powell (1795) 6 T.R. 320 failed because the original firm remained in existence and could perform its obligations by engaging a lawyer. A conditional fee agreement is capable in principle of transfer between law firms, as recognised in Plevin v Paragon Finance Ltd (No. 2) [2017] UKSC 23.
4. PSB Law’s cessation of practice did not terminate the agreements. It was not shown to be a breach, still less a repudiatory breach. Even if it had been repudiatory, the agreements would have continued unless Mr Warren accepted the repudiation and elected to terminate them. Instead, he consented to the transfer and continued instructing Hill Dickinson.
5. Consent was central to the novation and had to be fully informed, applying Surrey v Barnet & Chase Farm Hospitals NHS Trust [2018] EWCA Civ 451. The master was entitled to accept the evidence that Mr Warren understood his options, wished his matters to follow his solicitor, and gave full and informed consent. The advice concerning the consequences of terminating the existing agreements was not legally erroneous.
6. The master’s factual findings could not properly be challenged on the appeal. The transfer preserved Mr Warren’s representation and the benefit of pre-LASPO agreements. Permission to appeal was accordingly refused.

• High Court (Queen’s Bench Division): permission to appeal from the Senior Courts Costs Office was refused, on the basis that the proposed appeal had no real prospect of success and there was no other compelling reason for it to be heard.
• Senior Courts Costs Office: Master Leonard determined the preliminary issues and held that the conditional fee agreements had been validly transferred to Hill Dickinson LLP: [2018] EWHC B6 (Costs).