Solicitor—Costs—Conditional fee agreement

Court of Appeal, Civil Division, Lord Neuberger MR, Lloyd and Gross LJJ, 25 Jan 2011

A conditional fee agreement (CFA) providing for the claimant’s solicitors to indemnify her against payment of the defendant’s costs if the claim was dismissed is not champertous or otherwise contrary to public policy. It will therefore not invalidate a CFA which otherwise complies with s 58 of the Courts and Legal Services Act 1990.

Mark James (instructed by Belshaw & Curtin) for the claimants. Roger Mallalieu (instructed by Director of Communities Law and Governance, London Borough of Southwark) for the authority.  David Holland (instructed by the Law Society) for the interveners.

Two appeals before the court arose out of claims by residential tenants against the local authority landlord concerning alleged breaches of the landlord’s covenant. The claimants entered into a contract of engagement, which was a CFA with a 10% success fee. It also included the statement that: “If you