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This costs dispute arose out of a personal injury claim, caused by a road traffic accident. The accident occurred on 15 October 2011, and the claimant ultimately accepted the defendant’s Part 36 offer of £3,500 on 20 January 2015 (paragraphs 1 – 2).
While pursuing their case, the claimant was represented by three different firms of solicitors: firstly, Minster Law between 17 October 2011 and 14 November 2012; then TLW Solicitors between 16 November 2012 and 23 July 2014; and finally Russell Worth Limited from 24 July 2014 onwards. All three firms purported to act for the claimant under a conditional fee agreement (CFA). The claimant’s CFA with Minster Law was dated 19 October 2011, while their CFA with TLW was dated 17 January 2013 – on terms which provided for it to have retrospective effect from the date of initial instruction. TLW then transferred the claimant’s CFA to Russell Worth on 23 July 2014, with the latter firm commencing to work on behalf of claimant the following day (paragraphs 3 – 4).
The transfer of the claimant’s case from TLW to Russell Worth was initiated by TLW due to staff shortages. TWL’s letter to the claimant, dated 23 July 2014, explained that they “were under no obligation to consent to the transfer of your claim and file to Russell Worth” or, indeed, any other firm. However, the claimant was told that, if they did agree to the transfer, Russell Worth would work on the same “no win no fee terms” as set out in the TLW CFA. On 31 August 2013, the claimant signed the form confirming “my consent to the assignment of the CFA to Russell Worth Limited and agree that, from now on, Russell Worth Limited may perform the solicitors' obligations under the CFA in substitution for TLW Solicitors and that, from now on, my responsibilities under the CFA shall extend to Russell Worth Limited” (paragraphs 12 - 13).
At the detailed assessment of the claimant’s costs, the defendant sought to challenge the right of the claimant to recover their costs under the terms of the TLW CFA. In determining this challenge, the court was invited to consider three key issues:
Delivering his ruling in the SCCO, Master Leonard evaluated each of the issues identified in turn.
Having decided that the claimant’s CFA of 17 January 2013 was validly assigned between TLW and Russell Worth, Master Leonard therefore concluded that the indemnity principle did not operate to prevent the recovery of the costs incurred by the claimant. Those costs were therefore to be paid to both TLW and Russell Worth under the terms of the TLW CFA.
In reaching his conclusions the Master cited with approval the decision of HHJ Graham Wood QC in Jones v Spire Healthcare...
"… the court is concerned with choses in action, that is non-tangible property and future entitlements, or present entitlements realisable in the future. The general principles... can be distilled as follows:
…The benefit of a contract, other than one which involves personal skill and confidence dependent upon a particular individual discharging obligations under it, can be assigned, whereas the burden cannot, subject to certain exceptions. One of those exceptions arises where the benefits and burdens are inextricably linked, for instance where entitlement to the right or benefit is dependent or conditional upon the discharge of certain responsibilities."
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