Ryan Perrett v Wolferstans LLP

A retainer described as a conditional fee agreement is not thereby a damages-based agreement. Where non-contentious work is involved, an agreement may fall outside the statutory damages-based agreement regime by virtue of Courts and Legal Services Act 1990, section 58AA(9). A solicitor is not generally required to offer or advise on a statutory contingency arrangement which the firm does not provide, although the solicitor must explain the funding arrangement offered and provide the best possible information about likely costs. A breach of that obligation does not automatically invalidate the retainer or cause recoverable loss. Non-contentious costs must be assessed under section 70 of the Solicitors Act 1974 by reference to the Solicitors (Non-Contentious Business) Remuneration Order 2009, starting with time spent and then considering whether the other prescribed factors require adjustment.

The claimant instructed the defendant after a workplace accident under a written agreement described as a conditional fee agreement. He alleged that representations by the defendant’s staff meant that all his legal costs would be paid by the opponent and that the agreement was, in substance, a damages-based agreement or an unfair non-contentious business agreement.

The preliminary issues concerned the characterisation and construction of the retainer, compliance with the applicable statutory and professional regimes, the effect of the Consumer Rights Act 2015, and the method for assessing non-contentious costs. The court also considered whether the costs should be assessed as fair and reasonable under the 2009 Remuneration Order.

1. Character of the retainer. The agreement was a conditional fee agreement and, at most, an invalid non-contentious business agreement. It was therefore outside the statutory damages-based agreement regime. Section 58AA(9) of the Courts and Legal Services Act 1990 prevented the damages-based agreement requirements from applying to the non-contentious agreement. The claimant’s challenge therefore had to be assessed under the conditional fee agreement provisions, not the Damages-Based Agreements Regulations 2013 (paras [32]–[45]).
2. Professional obligations. The defendant was entitled to limit its funding options and was not required by the SRA Code to advise on a damages-based agreement which it did not offer. The obligation to act in the client’s best interests was not an absolute requirement to identify every theoretically preferable funding model. The defendant nevertheless failed to provide the best possible information about likely recoverable costs. That breach did not invalidate the agreement or establish loss. The written agreement clearly imposed a 25% cap, distinguishing the position from Belsner (paras [46]–[58], [70]–[82]).
3. Representations and the CRA. The alleged receptionist’s statement did not establish a contractual term under section 50 of the Consumer Rights Act 2015. Alternatively, the claimant subsequently expressly agreed to the deduction when accepting settlement terms, engaging section 50(2)(b) (paras [59]–[69]).
4. Assessment. The agreement was not a valid non-contentious business agreement. The costs therefore fell to be assessed under section 70 of the Solicitors Act 1974 and Article 3 of the 2009 Remuneration Order. The court should begin with time spent, then consider whether the other prescribed factors require adjustment to reach a fair and reasonable figure. The listed factors should receive greater weight than additional, unspecified considerations (paras [83]–[95]).
5. The argument that the settlement mandate itself constituted a non-contentious business agreement was left aside pending the Court of Appeal’s decision in Holcroft (paras [96]–[97]).