Court of Appeal
Date: 07/10/05

The Issues:In breach of the Law Society’s Code of Conduct, solicitors for the successful Claimant had failed to provide that Claimant with regular costs estimates. The defendant argued that the Solicitors’ Code of Conduct had statutory force (because it was contained in a Statutory Instrument) and any failure to comply was therefore a breach of the law which rendered any retainer unlawful and unenforceable.

Held: that while the Code of Conduct did indeed have statutory force, it was not intended to be utilised by a Defendant to avoid their proper obligation to pay costs. The Code provided instead for disciplinary action against a solicitor and a monetary award in favour of the solicitor's client, if necessary. If a breach of the Code could be shown by a paying party to have caused an actual increase in costs, then a costs judge had the discretion to disallow that increase, but this was very different from disallowing all costs.

Comment: In November 2005 the CFA Regulations were repealed and CFAs signed after that date were governed only by the Solicitor’s Code of Conduct which was amended to control how solicitors dealt with CFAs. The Court of Appeal’s clear decision is that any breach of the Solicitors’ Code of Conduct will not cause costs to be wholly disallowed, so a failure to follow the Code of Conduct after November 2005 will not have the same consequences as a failure to follow the CFA Regulations which applied to pre-November 2005 CFAs.

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