Budana: Court Of Appeal Rules That CFAs Can Be Assigned

The Court of Appeal has ruled that a conditional fee agreement (CFA) can be assigned from one law firm to another. The decision will allow firms to continue to claim costs and success fees under pre LASPO CFA's assigned to them. Budana v The Leeds Teaching Hospital NHS Trust [2017] EWCA Civ 1980 Speed Read

LEGAL UPDATE: The Court of Appeal has ruled that a CFA can be assigned to another firm of solicitors. The case between Alina Budana and The Leeds Teaching Hospital Trust is the latest in a series of cases considering the assignability of CFAs which became significant following the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) on 1 April 2013. This restricts the ability to recover success fees under CFA's entered into after this date. The Court of Appeal ruled that the CFA in question fell within the transitional provisions of LASPO, as a "conditional fee agreement entered into before" LASPO came into force, notwithstanding its subsequent transfer.

Alina Budana tripped and fell on the hospital pavement whilst attending an appointment. She instructed Baker Rees to act for her in 2011 in a personal injury claim against The Leeds Teaching Hospital Trust. Budana and Baker Ross had entered into a conditional fee agreement (CFA) with a 100% success fee.

In March 2013 Baker Rees left the personal injury market and assigned a number of its cases, including any associated CFAs, to Neil Hudgell Limited. Budana entered into a second CFA with Neil Hudgell which, under LASPO, had no success fee and was expressed to be effective only in the event that the original CFA failed. The hospital settled with Budana then tried to claim that the original CFA had not been validly assigned to Neil Hudgell, meaning the success fee was not recoverable.

At the first hearing, the court ruled that the original CFA had been terminated before it was assigned to Neil Hudgell. Baker Rees had written to Budana three days before it had assigned her case to Neil Hudgell stating that it had 'decided to stop handling personal injury litigation'. The judge ruled that this evidenced that Baker Rees had terminated its retainer with Budana, and on this basis there was no CFA to transfer to Neil Hudgell.

However, the judge also said that if there had been a CFA to transfer he would have been bound to follow the decision in Jenkins v Young Brothers Transport Ltd [2006] EWHC 151 as authority for the proposition that a contract involving...