The Practical Lawyer


CFA – assignment

The introduction of LASPO in April 2013 caused problems for clients who already had CFAs, but then wanted to move to another firm.

The danger was that any new CFA would be subject to LASPO. The way around this problem was thought to be a formal assignment, although it was subsequently argued that this may be a novation instead. In any event, there was much relief when the CA confirmed in Budana [2017] that an assignment was valid. But, the key point to note is that the transfer paperwork in that case was in apple-pie order (as a note in the Gazette points out, ‘the bush telegraph reported that it was said in court that it was almost too good’)! The paperwork included:

  • a letter to the client explaining everything, and asking for the client’s consent to instruct the successor firm;
  • a properly drafted transfer agreement under which the business of the first firm was transferred to the successor firm;
  • a master deed between both firms in which all PI claims (including the disputed ones) were assigned;
  • a deed of assignment between the client and the successor firm;
  • the successor firm going on the court record in April 2013.

But, the CA made it clear that everything would depend on the precise terms of the contractual arrangements between the parties. Thus, properly drafted transfers (with full supporting documents) will be valid. But, suppose the paperwork is not perfect? As a starting point, it is critical that the consent of the client is obtained. If it is not, or if the client is not consulted, or presented with a fait accompli, then there will almost certainly not be a valid transfer.

As the article in the Gazette points out, if corners have been cut, details omitted, or – most importantly – if the client has been left out of the deal, then the transfer to the new firm may not be valid. Then, as a double whammy, if the transfer is invalid then the original solicitor who tried to assign this CFA may instead have ended up unilaterally terminating it; that could be said to be a ‘repudiation’ in which case the firm will not be entitled to be paid, even if the claimant goes on to win!

The end result is that the earlier headlines about the CA having confirmed that CFA transfers are valid is an over-simplification; it will all depend on the quality of the paperwork, and clear evidence that the client was properly consulted. See excellent article in [2018] LSG 19 February 21.


Most-read articles

Court of Protection – trust deputies
Friday, 13 April 2018
How does the CoP approach an application to appoint a trust corporation as a deputy? HHJ Hilder has, in a recent CoP ruling involving 36 applicants and 11 trust corporations, analysed the law on the... Read more...
Professional – update
Friday, 13 April 2018
 A reminder that internal e-mails can result in SRA action; for a case involving sexist, racist and homophobic e-mails sent to a work colleague see [2018] LSG 12 February 2. Read more...
CFA – assignment
Friday, 13 April 2018
The introduction of LASPO in April 2013 caused problems for clients who already had CFAs, but then wanted to move to another firm. Read more...
Agent of change – new builds?
Friday, 13 April 2018
The ‘agent of change’ principle has been hotly debated in planning circles for some time. Indeed, the concept is likely to feature in the revised National Planning Policy Framework and the draft... Read more...
Withdrawing admissions – increase in value?
Friday, 13 April 2018
Suppose a defendant is faced with a low-value claim and decides to admit liability; later, it turns out that there is a significant increase in the value of the claim. At that stage, can the... Read more...
Service charges – estoppel?
Friday, 13 April 2018
Suppose service charges have been raised for many years in a way that does not properly accord with the wording of the lease; if T subsequently questions those service charges, can L argue that... Read more...
Service charges – code of practice
Friday, 13 April 2018
The RICS has published the proposed changes to its Code of Practice on service charges. The important change is that RICS members must act in accordance with eight core principles; the Code is no... Read more...
Japanese knotweed – nuisance
Friday, 13 April 2018
One of the (potentially) most important decisions last year was a humble county court case in which it was held Network Rail was liable after Japanese knotweed grew close to neighbouring terraced... Read more...
Adoption – new regulations
Friday, 13 April 2018
 A number of new provisions in relation to adoption are in force (as of 5 January 2018) under the Adoption and Care Planning (Miscellaneous Amendments) Regulations 2018. Read more...
Sickness – on holiday
Friday, 13 April 2018
 A worker who falls ill during annual leave is entitled to take that holiday leave at a later date. This is so whether the sickness commenced before, or during, the holiday. Read more...


IAG International
MSI Global Alliance
In House Lawyer
Join the IBA now!