Findley v Motor Insurers’ Bureau & Anor [2009] EWHC 90130 (Costs)

Posted on Tuesday, January 13th, 2009

The Claimant sustained severe head injuries in a road traffic accident on 22/04/01. The matter was funded under the TAG scheme and a CFA was entered into with the Claimant on 20/07/01. A 2nd CFA was entered into in August 2002following the Judgment in English v Clipston.

Following a Conference with Counsel on 04/02/04, the Claimant was advised that he needed to have a Litigation Friend. The Claimant’s sister became his Litigation Friend following a certification on 09/03/04 by the Claimant’s GP that that he was not capable of managing his own affairs because of his permanent mental disability.

The claim was issued in April 2004 and liability was admitted by the 2nd Defendant (the MIB) on 06/01/05. The matter settled on 25/06/07 by consent for the sum of £1 million, with the 2nd Defendant to pay the Claimant’s reasonable costs, to be assessed if not agreed.
The Defendant raised issues with, inter alia, the validity of the 2CFAs. With regards to the 1st CFA, the Defendant argued that it was unenforceable because of material breaches of Regulation 4. With regards to the 2nd CFA, the Defendant argued that it was unenforceable and did not comply with Regulation 4 or was void due to the Claimant’s solicitor not advising that the 1st CFA was unenforceable and that the Claimant could seek independent legal advice.

The Claimant contended, however, that Regulation 4(2)(e) had been complied with and that if there had been a breach, it was immaterial. It was also contended that if the 1st CFA was enforceable, the 2nd CFA had no effect and that if the 1st CFA was unenforceable, the 2nd CFA was enforceable. If both CFAs were unenforceable, the Claimant was entitled to recover the costs of disbursements and Counsel’s fees.

It was found that the 1st CFA was unenforceable as the Claimant’s Solicitor had failed to declare the interest in the TAG policy. The 2nd CFA was also found to breach the Regulations as no adequate explanation was given to the Claimant regarding the TAG policy and the Solicitor’s interest in recommending it was not declared. However, as the breaches did not have an adverse effect on the protection afforded to the Claimant or on the administration of justice, the breaches were immaterial and the costs relating to the 2nd CFA were allowed. The CFA with the Claimant had come to an end in February 2004 due to his lack of capacity but the Litigation Friend had instructed the Claimant’s solicitors on the same terms as the 2nd CFA. The Litigation Friend’s failure to sign the 2nd CFA was also immaterial. It was found that the 1st CFA was not terminated when the 2nd CFA was entered into and the Claimant accepted that if the 2nd CFA was effective, the 1st CFA was unenforceable and so no costs were payable under the 1st CFA. The Claimant was also able to recover the full amount of disbursements which were reasonable and proportionate.

http://www.bailii.org/ew/cases/EWHC/Costs/2009/90130.html

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