Court of Appeal ruling for Clarke Willmott may boost use of CFAs

Clarke Willmott has won a significant Court of Appeal ruling that could see the increased use of conditional fee arrangements (CFAs) in commercial litigation.

The appeal in the case of Gloucestershire County Council v Evans & Ors found that different success fee uplifts should not be applied in a discounted CFA, as opposed to operating on a no-win no-fee basis.

Alexander Hutton of Hailsham Chambers, acting for the respondents Gloucestershire County Council, said the ruling means that more commercial litigation will turn to dis-counted CFAs for funding.

“Law firms have shied away from using CFAs on a no-win no-fee basis as they didn’t like the idea of coming away with nothing,” said Hutton. “With discounted fees at least they’re guaranteed a sum if they lose and reap the same benefits of a no-win no-fee if they win.”

Under discounted CFAs, Clarke Willmott offered its services at £95 per hour if it lost – though after winning the claim sought costs at its full rate of £145 an hour, with a 100 per cent success fee on this rate.

The appellants argued that Clarke Willmott should have only received the 100 per cent success fee on the £50 difference between the full and discounted rate, and that the law firm was actually claiming a 290 per cent success fee, which is against the Collective Conditional Fee Agreements Regulations 2000.

The Court of Appeal judges, led by Lord Justice Dyson sitting with assessor Master O’Hare, however, held that the same rules apply for discount rates as with no-win no-fee, meaning £145 should be used.

The judges, however, added the caveat that if the figure was too high a more detailed assessment should be sought.

Hutton was instructed by commercial litigation partner William Whiteley, while Gloucestershire-based firm Tayntons Solicitors’ managing partner Martin Edden instructed Nicholas Bacon of 1 Temple Gardens.