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Update: costs

Simon Gibbs considers the ongoing challenges to CFAs and whether a recent High Court judgment may offer a potential solution

17 March 2009

The tail-end of challenges to conditional fee agreements (CFAs) entered into when the (now revoked) CFA Regulations 2000 were still in place continues to wag with surprising rigour.

A materially adverse effect

The Court of Appeal in Hollins v Russell [2003] EWCA Civ 718, tried to kill off the majority of such challenges by introducing the test of ‘materiality’. A CFA would not be held to be invalid simply because there was a technical breach of the regulations. To be found invalid would require the breach to have “had a materially adverse effect either upon the protection afforded to the client or upon the proper administration of justice”. Although this test was clearly designed to reduce the number of challenges mounted, it still begged the question as to what would amount, in any given case, to a ‘material’ breach. Several years of continuous litigation followed trying to answer this question.

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