Bolt Burdon has won a ruling relating to an unusual contingency fee arrangement.
In Bolt Burdon v Tariq & Ors [2016] EWHC 811 (QB), Tariq and the other defendants asked the firm to represent them on a contingency fee basis in a claim against AlIied Irish Bank over a mis-sold interest rate swap. Bolt Burdon declined after identifying significant difficulties with the case, but the defendants persuaded it to act on the basis it would get 50% of any compensation.
An offer of £821,045 was accepted, and Bolt Burdon invoiced for half that plus VAT and disbursements but the defendants refused to pay. They claimed Bolt Burdon was not an “effective cause” of the offer, the firm had incorrectly portrayed the claim as hopeless, and the contingency fee agreement was unfair and unreasonable under the Solicitors Act 1974.
However, Mr Justice Spencer rejected these arguments. He held that the agreement was “not unfair” as Tariq knew “exactly what he was agreeing to”, that the firm fulfilled its duties, and no realistic alternative funding option had been available.
Simon Bishop, solicitor at Bolt Burdon, says the case “goes to the heart of the current issues relating to solicitors’ costs and fee agreements.
“The profession must react to the changing climate relating to client fee arrangements, particularly in the Jackson era. In that context it is very encouraging that the court has upheld the agreement in this case.
“With the amendments to the Damages Based Agreements Regulations expected very soon, this judgment will no doubt give courage to advisers and clients who want to explore contingency fees and damages-based agreements.”
