4VVV LTD & Ors v Nicholas Spence & Ors

Non-compliance with the pre-contract information obligation in regulation 13 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013/3134 does not prevent a binding distance contract from arising. The obligation prescribes the time for performance, while the Regulations specify the consequences of particular failures. Contemporaneous contractual documents must be read together. A procedural costs-sharing order cannot vary solicitors’ contractual rights, but may regulate whether claimants can recover costs on a joint-liability basis.

Following a substantial trial, the court considered consequential costs issues. The defendants argued that an alleged breach of regulation 13 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013/3134 made the claimants’ retainers with their solicitors unenforceable, so that the indemnity principle prevented recovery.

The claimants also relied on contractual provisions said to impose joint and several liability on corporate claimants. The defendants contended that the relevant conditional fee agreement imposed liability only on natural persons and that an earlier costs-sharing order required liability and recovery to be several.

1. The alleged failure to comply with regulation 13(1) did not make the solicitors’ retainers unenforceable. The words requiring information to be provided before the consumer is bound prescribe the time for performance, rather than making compliance a condition precedent to formation of a binding contract.
2. This construction was supported by the specific consequences in regulation 13(5) and regulation 14(5), the contractual-term provision in regulation 18, and the extended cancellation regime in regulation 31. The indemnity-principle objection therefore failed.
3. The client care letter, terms of engagement and discounted conditional fee agreement formed a contemporaneous contractual suite. In context, “individuals” included both natural and legal persons. The corporate claimants therefore had joint and several liability for the solicitors’ costs.
4. The Costs Sharing Order could not vary the solicitors’ contractual rights because they were not parties to the proceedings. Its wording nevertheless prevented the corporate claimants recovering costs from the defendants on the basis of their joint liability. The court declined retrospectively to vary the order.