The Callery vs Gray judgment has brought some welcome clarification to the problems of conditional fee agreements (CFAs).
It was strenuously argued in court by the defendants that the success fee should be purely nominal. But the Court of Appeal accepted our arguments that there are risks with every case and that the success fees of winning cases must pay for the costs of losing cases.
This result was vital because, if the Court of Appeal had not understood the importance of recovering proper success fees and insurance premiums, it was hard to see how conditional fee agreements could have survived.
The result could so easily have been that only the most certain cases would be pursued. This would lead to a consequent denial of access to justice to large numbers of deserving claimants.
We also hear a County Court judgment, Sarwar vs Alam, is to go to the Court of Appeal and may be heard in early September.
This deals with the situation in which a CFA has been used where there is also a legal expenses insurance (LEI) policy in place. The court held that LEI should be used to fund the case.
More surprisingly, the judgment also found that the claimant's solicitors had responsibility for establishing whether a defendant's LEI covered a personal injury claim by their passenger.
I hope the Sarwar appeal will finally provide a platform for the examination of the role of LEI.
The Association of Personal Injury Lawyers (APIL) has always been in favour of a choice of funding, provided accident victims are not denied access to a solicitor of their choice or are not penalised for choosing their own solicitor.
Some of our members have locked horns with insurers that refuse to allow clients to choose non-panel solicitors before proceedings are issued – a practice which, we would argue, contravenes both a European Directive and the Insurance Companies' (Legal Expenses Insurance) Regulations 1990.
Unfortunately, some insurers continue to insist on an interpretation of the regulations that restricts a claimant's freedom of choice. We at APIL will continue to argue the point and it will be interesting to see whether the combined effect of the Callery and Sarwar cases will add anything to the debate.
