The TAG decision raises more questions than it answers, says Lord Hunt

Last Wednesday, the senior costs judge delivered a preliminary ruling on The Accident Group (TAG) test cases, which will be the first of two judgments to determine the fate of costs recoveries under the TAG scheme.

Solicitors undertaking conditional fee agreement (CFA) work have duties imposed on them by the Access to Justice Act [1999] and subordinate legislation - in this case the Conditional Fee Agreement Regulations [2000]. This preliminary ruling was concerned with whether the solicitors could delegate their duties under the regulations to TAG representatives, who would not normally have any legal training or expertise.

Parliament introduced the regulations for good reason. The arrangements under which legal services are now provided are often run by claims management companies, where solicitors are merely a service provider to the company.

In many respects it is the claims management company that has control over how the case is run, rather than the client - or the solicitor. As the products are sold to clients in simple terms as "no-win, no-fee" litigation services, care needs to be taken.

The claimant may still have to pay substantial legal costs in certain (not uncommon) circumstances. These are required by the regulations to be fully explained to the claimant, so that he understands the arrangement he is considering signing up for.

It is particularly important when the "norm", rather than the exception, for legal costs, is now significantly to exceed the damages in run-of-the-mill personal injury actions, as can be seen with the 18 TAG test cases.

Against that background, it was perhaps surprising, therefore, that Master Hurst ruled that the duty was delegable to anyone. There is no doubt that the explanation and advice required to be given to the client under the regulations is complex and requires skill and expertise, which it seems unlikely that TAG representatives possess.

The wider implications of the decision bear consideration. Does a surgeon, who must explain the possible consequences of an operation to a patient, now have carte blanche to delegate that duty to anyone? Professional guidelines suggest otherwise, but in the legal profession there is seemingly no such restriction.

The regulatory requirements for insurance companies permit delegation, but the FSA addresses issues of quality by requiring that proper control is exercised, where the people delegated to are not themselves approved. Again, no such control appears to be required of the legal profession.

This judgment raises rather more questions than it answers and it will be interesting to see what the Court of Appeal makes of the decision.

Lord Hunt is senior partner of national law firm Beachcroft Wansbroughs.