Finnan v Candey Ltd: if it meets the touchstones of clarity and fairness, unorthodox CFA may be enforced as a contentious business agreement.

Mr Finnan appealed against a decision requiring him to pay his former solicitors, Candey Ltd, £120,000. The appeal focused on the enforceability of a Conditional Fee Agreement (CFA); Mr Finnan mounting no fewer than four attacks, one of which have led to important clarification.

In addition to fending off attacks that went to the validity of the CFA, Candey asserted that the CFA was a contentious business agreement (CBA) within the meaning of Section 59 of the Solicitors Act 1974 (a relatively rare beast). The implication, for Mr Finnan, was significant, as - provided that the court finds it to be fair and reasonable - a CBA may be enforced, i.e. the client does not enjoy the right to call for a fulsome detailed assessment, her/his opportunities to attack the costs being quite limited under Section 61.

Section 59 of the Solicitors Act 1974 provides:

"…a solicitor may make an agreement in writing with his client as to his remuneration in respect of any contentious business done, or to be done, by him (in this Act referred to as a "contentious business agreement" ) providing that he shall be remunerated by a gross sum or by reference to an hourly rate, or by a salary, or otherwise, and whether at a higher or lower rate than that at which he would otherwise have been entitled to be remunerated."

Having noted that the provision is and is apt to cover almost any agreement for remuneration for contentious business, the judge went on to consider Mr Finnan's complaint, which in essence was that the CFA could not be a CBA because it was insufficiently clear about what he may ultimately become liable for. The CFA was indeed a little unusual, in that it provided for a payment on account of £60,000 plus VAT, and then - in the event of success - a further payment of £40,000 plus VAT, and yet further remuneration (beyond the £100,000 plus VAT) but only to the extent that such further costs could be recovered from the opponent. Mr Finnan argued inter alia that the agreement, which provided for a very broad range of hourly rates (between £150ph and £700ph), was not sufficiently specific. However, rejecting that challenge, the judge pointed out that the certainty that hallmarks CBAs was - in this case - found, not in the calculability of the fees at a given (admittedly broad) range of hourly rates, but in the fact that the agreement provided him with the certainty that he would personally part with either £60.000 plus VAT or £100,000 plus VAT and nothing more.

Afqar Dean,

Denovo I Legal Costs Experts

The decision can be viewed here - Finnan v Candey Ltd [2024] EWHC 2157 (Ch) (19 August 2024) (bailii.org)

Finnan v Candey Ltd: if it meets the touchstones of clarity and fairness, unorthodox CFA may be enforced as a contentious business agreement.

Mr Finnan appealed against a decision requiring him to pay his former solicitors, Candey Ltd, £120,000. The appeal focused on the enforceability of a Conditional Fee Agreement (CFA); Mr Finnan mounting no fewer than four attacks, one of which have led to important clarification.

In addition to fending off attacks that went to the validity of the CFA, Candey asserted that the CFA was a contentious business agreement (CBA) within the meaning of Section 59 of the Solicitors Act 1974 (a relatively rare beast). The implication, for Mr Finnan, was significant, as - provided that the court finds it to be fair and reasonable - a CBA may be enforced, i.e. the client does not enjoy the right to call for a fulsome detailed assessment, her/his opportunities to attack the costs being quite limited under Section 61.

Section 59 of the Solicitors Act 1974 provides:

"…a solicitor may make an agreement in writing with his client as to his remuneration in respect of any contentious business done, or to be done, by him (in this Act referred to as a "contentious business agreement" ) providing that he shall be remunerated by a gross sum or by reference to an hourly rate, or by a salary, or otherwise, and whether at a higher or lower rate than that at which he would otherwise have been entitled to be remunerated."

Having noted that the provision is and is apt to cover almost any agreement for remuneration for contentious business, the judge went on to consider Mr Finnan's complaint, which in essence was that the CFA could not be a CBA because it was insufficiently clear about what he may ultimately become liable for. The CFA was indeed a little unusual, in that it provided for a payment on account of £60,000 plus VAT, and then - in the event of success - a further payment of £40,000 plus VAT, and yet further remuneration (beyond the £100,000 plus VAT) but only to the extent that such further costs could be recovered from the opponent. Mr Finnan argued inter alia that the agreement, which provided for a very broad range of hourly rates (between £150ph and £700ph), was not sufficiently specific. However, rejecting that challenge, the judge pointed out that the certainty that hallmarks CBAs was - in this case - found, not in the calculability of the fees at a given (admittedly broad) range of hourly rates, but in the fact that the agreement provided him with the certainty that he would personally part with either £60.000 plus VAT or £100,000 plus VAT and nothing more.

Afqar Dean,

Denovo I Legal Costs Experts

The decision can be viewed here - Finnan v Candey Ltd [2024] EWHC 2157 (Ch) (19 August 2024) (bailii.org)