Seladore Legal v Pogust Goodhead: High Court upholds £2.2m CFA in rounding dispute

The High Court has granted summary judgement in favour of Seladore Legal Limited in its claim for £2.2 million in unpaid legal fees, dismissing arguments by PGMBM Law Limited, trading as Pogust Goodhead, that the conditional fee agreements underpinning the claim were unenforceable.

The case, decided by Master Pester in the Business and Property Courts on 1 June 2026, centred on whether the retainers complied with section 58(4)(b) of the Courts and Legal Services Act 1990, which requires a CFA providing for a success fee to state the percentage by which fees are to be increased upon success.

Background

Seladore and PGMBM entered into two discounted CFAs in May 2023, covering work on major group litigation arising from the collapse of the Fundão tailings dam in Brazil and related litigation support. Under the retainers, PGMBM paid discounted hourly rates with an agreed uplift to 170% of standard rates upon defined success.

Between May 2023 and October 2024, Seladore issued 20 interim invoices totalling £978,411.03, of which PGMBM paid £886,048.23. Seladore subsequently issued final statute bills for £3,095,874.63, leaving an outstanding balance of £2,209,826.40, which forms the subject of these proceedings.

PGMBM resisted payment, contending that the retainers were unenforceable under the 1990 Act and counterclaiming for the amounts already paid. Its central argument was that the retainers failed to state a single, precise percentage uplift as required by statute, and that the reference to rounding in clause 6.3 meant the effective uplift differed fractionally across fee-earner grades.

The rounding point

Of the ten fee-earner grades in the retainer schedule, only the "Of Counsel" rate produced an exactly 70% uplift. For the remaining grades, rounding up to the nearest 50 pence generated uplifts ranging from 70.06% to 70.21%, with a mean of 70.09%. PGMBM characterised this as a "stark departure" from what the 1990 Act permits, arguing that no single stated percentage governed the success fee.

Master Pester rejected this analysis. The retainer's statement that uplifted rates "represent 170% of the standard fee rates (subject to rounding)" was, he held, functionally identical to stating a 70% increase, and to conclude otherwise "would be empty formalism." Reading clause 6.3 alongside the rate table in clause 5.3, the position was sufficiently clear to satisfy the statutory requirement. There was, in his view, literal compliance with section 58(4)(b).

Materiality

Even had there been a technical breach, Master Pester held it would not have been material. Applying the test from Hollins v Russell [2003], the question is whether a departure from the statutory requirements has had a materially adverse effect on the protection afforded to the client or on the proper administration of justice.

On the figures, the aggregate effect of rounding amounted to £1,678 on a total bill of approximately £2.07 million. The court found no basis for the suggestion that PGMBM was left uncertain as to its liability, noting that its own evidence demonstrated it could identify the precise increase "in terms of pounds and pence."

PGMBM's further argument that the materiality test has no application to breaches of primary legislation was also dismissed. Master Pester affirmed that Hollins v Russell permits the test to operate in relation to section 58(4)(b), consistent with the Court of Appeal's treatment of a comparable situation in Tichband v Hurdman.

The enforceability aspect of PGMBM's counterclaim consequently falls away. Remaining disputes as to the reasonableness of the fees charged will proceed, with consequential matters to be addressed at a further hearing.