Can pre Jackson Conditional Fee Agreements be assigned?

07 Jul 2016

The legal community has, over the last few years, faced a significant degree of uncertainty regarding the ability to assign pre-Jackson Conditional Fee Agreements (CFA), also known as “no win no fee” Agreements. Assignment creates no new rights, but simply transfers existing rights from one party, the assignor, to the new party, the assignee. Under a CFA entered into prior to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LAPSO 2012), also known as the “Jackson reforms”, the other side would pay both the ‘After The Event’ (ATE) insurance policy premium and a success fee (an uplift on fees of up to 100%) of the winning party in addition to costs and damages. However, when LAPSO 2012 came into effect, in April 2013, CFAs were changed such that the Claimant must now pay the ATE insurance premium and the success fee (capped at 25% of their past and general damages) out of his or her damages.

As a result of this difference a key question facing practitioners is whether a pre-Jackson CFA can be assigned (given that the previous arrangement is generally better for Claimants). The general view has been that any contract involving a personal service can never be assigned (as established in Griffith v Tower Publishing [1897]), and a contract between a solicitor and client is indeed a personal service (confirmed in Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2015]).

However, the exception to this lies in the concept of a ‘conditional burden’ as expressed in Jenkins v Young Bros Transport Ltd [2006]. Its application in different situations has been examined, in the first instance of Jones v Spire Health Care [2015] where the rule in Jenkins was applied and was held to be not applicable in this instance, meaning that the pre-existing, pre-Jackson CFA wasn’t assigned. However, on appeal it was held that Jenkins was applied too narrowly, a CFA could be assigned in this case, from one firm of solicitors to another.

Nonetheless, it should be understood that, whilst Jenkins was held to be applicable in the case of Jones, the rule is being applied very strictly and assignment of CFAs is often not possible. This is evident in Alina Budana v The Leeds Teaching Hospitals NHS Trust where a CFA was held to have in fact been terminated before it had been assigned and therefore no assignment could have taken place and no costs could be paid under it.

Ultimately, whilst in some cases it seems that assignment has been held to have taken place the Court generally seems to be taking a strict stance on allowing CFAs to be assigned other than where there is a very close connection between the two firms (for example where a firm continues acting but simply becomes a limited partnership). It remains to be seen how further cases will clarify the true position.


James Braund