Sidhu v Sandhu & Anor [2008] EWHC 90108 (Costs) (24 July 2008)

This was a matter before Master Simons, dealing with the enforceability of the Defendant’s CFA following the setting aside of an Order made by a Deputy Costs Judge in which he held the CFA was unenforceable.

It was submitted by the Claimant that the Defendant’s CFA did not comply with Regulation 3(1)(b) of the Conditional Fee Agreements Regulations 2000, in that it did not specify the amount of the success fee which related to postponement and was therefore unenforceable.

The Defendant submitted that there had been no breach and even if there had been a breach in the Regulations, this breach was immaterial. The Defendant referred to the retainer letter which stated that the client would receive monthly bills with interest to be charged at 2% if the bills were not paid within 14 days. The Defendant therefore argued that this made it clear that there was no element of postponement.

Master Simons found that the CFA did breach Regulation 3(1)(b) as the CFA did not specify how much of the percentage increase, if any, related to the cost to the legal representative of the postponement of the payment of his fees and expenses.

The purpose of the Regulation 3(1)(b) was to make sure that the client was aware of his financial obligations and requirements, however, the contradictory statements made in the CFA caused confusion as to whether the client would have to bear any part of the success fee.

Master Simons also found that there had been a material breach and that he was bound by the case of Utting v McBain.