CFA that named wrong defendant still valid because of context at time it was signed

A conditional fee agreement (CFA) that named the wrong defendant was still valid because the context was more important than the actual text, the Court of Appeal has ruled.

Malone v Birmingham Community NHS Trust [2018] EWCA Civ 1376 concerned a prisoner who claimed there had been a negligent failure to diagnose that he had testicular cancer.

The CFA he signed with NewLaw Solicitors said it covered “all work conducted on your behalf following your instructions provided on [sic] regarding your claim against Home Office for damages for personal injury suffered in 2010”.

His solicitors had trouble identifying the right defendant – the prison was operated by the Ministry of Justice but health care services were provided by two NHS trusts.

Proceedings were issued naming all three, but the Birmingham Community NHS Trust acknowledged that it was responsible for the claimant’s treatment and only it was served. The claim settled for £10,000 plus costs.

District Judge Phillips, the regional costs judge for Wales, held that as a matter of construction the CFA did not cover a claim against the defendant and so no costs were recoverable, a decision upheld by His Honour Judge Curran QC.

In the Court of Appeal, Lord Justice Hamblen was not impressed with the drafting. “In the present case, the insertions made to the CFA demonstrate poor quality drafting and little attention to detail,” he said.

“The critical wording consists of only one sentence and yet it contains three manifest mistakes: (i) the omission of the date of the instructions and (ii) the omission of the definite article before ‘Home Office’ and (iii) the description of the claim as being against ‘Home Office’. The Home Office had not been responsible for operating prisons for some years.”

The judge said that, in accordance with the guidance provided by the Supreme Court last year in Wood v Capita Insurance Services, “the interpretation of such an agreement is likely to call for more emphasis on the factual matrix and contextual considerations and less principal emphasis on close textual analysis”.

The defendant accepted that the reference to ‘Home Office’ was a misnomer and that it should be treated as referring to the government authority responsible for HMP Birmingham, the Ministry of Justice.

Hamblen LJ said much turned on whether the words “regarding your claim against Home Office” are properly to be read as relating to and qualifying “all work conducted on your behalf” or the “instructions provided”.

He ruled: “As a matter of language, in my judgment the most natural reading of the critical wording is that the CFA covers ‘all work conducted’ on the claimant’s behalf which follows from the ‘instructions provided’ in respect of his claim ‘against Home Office’.

“In other words… the reference to ‘Home Office’ is descriptive of the instructions received rather than of the work to be done. It relates to past instructions rather than future work.

“This construction is supported by the contractual context. As is clear, no great care has been taken in relation to the drafting of the critical wording. This is consistent with the wording being descriptive rather than prescriptive.”

This was supported by broader contextual matters, Hamblen LJ continued, such as the uncertainty at the time the CFA was signed as to who the defendant was: “It is intrinsically unlikely that a reference to a named opponent in the description of the claim would be intended to limit the CFA to proceedings against that opponent, rather than simply to serve to describe the claim.”

Hamblen LJ concluded: “In my judgment, both textual and contextual considerations lead to the conclusion that the CFA is properly to be construed as not being limited to a claim against the Home Office/Ministry of Justice.”

Benjamin Williams QC (instructed by NewLaw Solicitors) represented the appellant/claimant, Richard Booth QC and Michael Deacon (instructed by Acumension) the respondent/defendant.



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Costs News
Published date
21 Jun 2018

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