Trust Issues

SCCO rules relationship of trust not needed to assign a CFA

Master Leonard has indicated that in the matter of Azim –v-Tradewise Insurance Services Limited [2016] EWHC B20 (22nd August 2016) that he agrees with the ruling in Jones –v- Spire Healthcare in that there does not need to be a relationship of trust for an assignment of a conditional fee agreement to be valid.

The matter related to a detailed assessment of the Claimant’s costs following a claim for personal injury arising from a road traffic accident.

Three firms acted for the Claimant and it was the transfer/assignment between the second firm of solicitors, TLW Solicitors (TLW) and the third firm Russell Worth Limited (RWL) that brought the supplemental point.

It was agreed that a number of cases would be transferred to RWL and the Claimant was informed accordingly with a Consent form stating “I also confirm my consent to the assignment of the CFA to Russell Worth Limited and agree that, from now on, Russell Worth Limited may perform the solicitors’ obligations under the CFA in substitution for TLW Solicitors and that, from now on, my responsibilities under the CFA shall extend to Russell Worth Limited…..”

In differing from the case of Budana v Leeds Teaching Hospitals NHS Trust the assignment was contemporaneous with the notice in writing, that is to say the notice under Section 136 of the Law of Property Act 1925. This reads;

(1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice—

In this instance the “notice was contemporaneous” with the assignment and as the notice had, quite properly been given, Master Leonard concluded that there was no basis for concluding that the assignment had failed to comply.

As such and naturally following on from this was therefore the conclusion that a novation did not take place. The CFA was valid in its assignment and the Claimant was given notice.

I suspect that we will continue to see Defendants take point in regard to the assignment of CFAs for some time to come (if only from an opportunistic standpoint). The revisiting and poring over of assignments is far from over. With the forthcoming appeal on the Budana case, Just Costs continue to monitor the situation and deal with assignments on a case by case basis.

Watch this space!

By Jonathan Wiseman - Senior Costs Draftsman

Jonathan Wiseman