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Hyde -v- Milton Keynes NHS Foundation Trust [2017] EWCA Civ 399

This Court of Appeal decision analysed the question of whether a Conditional Fee Agreement (”CFA”) was unenforceable if it was live at the same time as a Public Funding Certificate (”PFC”).

By way of background this was a Clinical Negligence case that was prolonged by a causation dispute. The Legal Aid Agency refused to increase the funding limitation and the Claimant switched to a CFA with a Success Fee and Insurance Premium (pre 1 April 2013). No application was made for the Public Funding Certificate to be discharged and the case proceeded under the CFA. Notice of Funding for the CFA was served however.

The substantive damages claim eventually settled for £325,000 (net of CRU). A Detailed Assessment was carried out wherein contentions were raised regarding the validity of the CFA as the PFC had never been discharged. In that first instance decision Master Rowley held that there had been no breach and the CFA was valid as the funding on the PFC had been exhausted in any event.

Following the Detailed Assessment the paying party then appealed to The Court of Appeal. They relied on Section 10 (1) and s 22 (2) of the Access to Justice Act 1999 (”the 1999 Act”). The receiving party argued that the aforementioned authority had not been breached as the PFC was regarded as superceded so double recovery would never occur.

The Court of Appeal held:

  1. The 1999 Act does not contain anything that would automatically render the CFA unenforceable
  2. Whether the CFA is unenforceable depends on whether there would be payment for services on a concurrent basis to the PFC
  3. As soon as the CFA was entered into it had the effect of automatically superceding the PFC as it precluded the solicitors from claiming from the LAA for those services
  4. Notwithstanding above points it is still permissable for the CFA to be invalid and it depends on the facts of the case, the intention of the receiving party and whether the PFC had been ‘spent’
  5. It is good practice to discharge the PFC in any event to avoid such litigation
  6. Appeal dismissed

 

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