On 5th December 2017 the Court of Appeal ruled in an important case that had been leapfrogged to them - Budana v The Leeds Teaching Hospitals NHS Trust  EWCA Civ 1980
The issue was whether claimants who were represented under a CFA signed pre-April 2013 whose cases had subsequently been transferred to a new firm (as a result of merger, acquistion or, indeed, for any other reason) post-April 2013 could recover success fees – and ATE premiums. Readers can get all the outline facts from the 4 New Square website at https://www.4newsquare.com/court-of-appeal-upholds-assignments-of-pre-laspo-cfas/ Leading costs silk Nicholas Bacon QC was instructed for the successful claimant firm and has hailed the decision as “probably the most significant costs case post Jackson”.
Giving the leading judgment, Gloster LJ said: “It is clear… that, objectively construed, the intention of the parties was that Hudgell [new firm] should simply be substituted in Baker Rees’s [old firm] place… under and subject to the same terms of the existing (and so far as the parties were concerned, at least) continuing retainer…
“[It would be] an over-technical application of the doctrine of novation so as to prevent any litigant, who had begun a claim under a CFA prior to 1 April 2013, from recovering costs in respect of a success fee, simply because a novation had occurred as a result of a change in the constitution of the firm of solicitors acting for her, or as a result of the conduct of her claim being transferred, for whatever reason, to a new firm of solicitors.”
In other words the CA took a purposive construction of the new regime and this approach could end up being reflected in other issues that come before that court. In the meantime this is welcome news for those firms who acquired cases – or even whole books of work - from other firms and removes a lot of uncertainty that has – in many cases – delayed or affected costs settlements since that time.
If you have any queries about retainers and/or recoverability please feel free to contact us. Our expert team of costs lawyers stand ready to help.