The Court of Appeal has confirmed that a Conditional Fee Agreement (CFA) can have retrospective effect, even if the agreement does not expressly state so, reported in the Law Society Gazette.
In the recent case of Singh & Others v Ingram, Lord Justice Coulson upheld the findings of both a costs judge and the High Court, ruling that the CFA covered all work done on the claim prior to its formal signing in 2015, It is also available on YouTube.
The CFA, entered into with the law firm Boyes Turner, contained a clause confirming that charges would apply for work done “in respect of which the firm has been engaged since 30 March 2012.” The paying party argued that because the CFA did not specifically use the word “retrospective”, it should not cover work completed before 2015.
However, the Court of Appeal rejected that argument. Lord Justice Coulson made clear that both parties understood that the CFA was intended to apply to all work from 2012 onwards. He stated that there is no requirement for the word “retrospective” to be used in a CFA for it to have that effect, nor is any particular form of wording necessary, provided the intention of the parties is clear.
The Court also found no fault with Boyes Turner’s handling of the CFA, rejecting any suggestion that they had failed to explain its effect properly to their client.
This judgment is an important reminder to solicitors that, while a CFA can apply retrospectively, careful drafting is essential to avoid ambiguity and potential disputes. It underlines that the courts will look at the overall intention of the parties when interpreting such agreements.
Counsel for the successful respondents, Andrew Warnock KC and Gurion Taussig of Deka Chambers, commented:
“The decision will be of relevance to all solicitors considering inclusion of retrospectivity within CFAs and highlights the need for careful drafting of such contracts to ward off challenges to costs upon detailed assessment.”
This specific wording was drafted by Boyes Turner to reflect their intention that the CFA would cover work undertaken from that date, thereby giving the agreement retrospective effect. The Court of Appeal upheld this interpretation, emphasizing that a CFA can apply retrospectively if the parties’ intention is clear, even if the agreement does not explicitly use the term “retrospective”.
For solicitors and litigators, this case reinforces the importance of making sure CFAs properly reflect the agreement reached, particularly when they are intended to cover historic work. However, where that intention is clear, a CFA can still be effective retrospectively even without explicit wording to that effect.
Key takeaway: A CFA can apply to past work without needing to spell out the word “retrospective”, but clarity is always recommended to avoid costs disputes.
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