On appeal, the claimant’s counsel made several arguments in support of their asserted right to costs.
Most importantly, it was argued that both the benefits and burdens of the claimant’s original CFA were inextricably linked, and thus were capable of being assigned. On that basis, the post-assignment costs accrued by SGI Legal should be recoverable (paragraph 23). Here, the claimant’s counsel relied heavily on the judgment of the (then) Rafferty J in Jenkins v Young Brothers Transport Ltd  EWHC 151. Rafferty J’s obiter in Jenkins had indicated one possible exception to the general rule that the benefit, but not the burden, of a contract could be validly assigned. And, relevantly for this appeal, in Jenkins, it had ultimately been decided that the validity of the assignment of a CFA could be upheld, because the “the relationship between client and the solicitor involves trust and confidence”.
Problematically, in this current dispute, DJ Jenkinson had previously distinguished the facts in Jenkins from the facts before him. In Jenkins, a client had loyally followed the same solicitor as they moved firms twice during the course of the client’s instructions. By contrast, in the case that DJ Jenkinson was now being asked to rule on, the claimant’s decision to transfer her case from Barnetts Solicitors to SGI Legal did not appear to be motivated in any way by a particular trust and confidence in any fee earner (paragraphs 12 – 17). In this latest appeal, the claimant’s counsel therefore argued that the ratio in Jenkins was, in fact, “based on an interpretation of the law which cannot be restricted only to those cases where personal trust and confidence was reposed” (paragraph 46). Effectively, it was argued, DJ Jenkinson should not have drawn into making such a distinction when reaching his conclusions (paragraph 50).
Alternatively, and arguing a new point on appeal, the claimant’s counsel asserted that, even if the CFA had become a novation, the important date for the CFA regulatory regime was the date the “arrangement” was entered into, rather than the date of the novated, or deemed, agreement (paragraph 24). Consequently, any person who took out a CFA prior to 1 April 2013 should have full benefit of the previous provisions (paragraph 53).
Making several additional “fallback” arguments, the claimant’s counsel firstly argued that, even if the agreement was covered by the post 1 April 2013 regime, the agreement was sufficiently clear to be enforceable (paragraph 25), and did not actually breach the new regime’s conditions (paragraph 54). However, if any breaches were present in the CFA, the claimant’s counsel additionally argued that they could either be ignored (paragraph 56) or severed by adopting the “blue pencil” test (paragraph 57).
In relation to their own appeal, the defendant argued that the claimant should not be allowed to recover their pre-assignment costs on the basis that, when the assignment was actually made, no such right to payment existed. At that point in time, the claimant only had a contingent expectation that such an entitlement might arise in due course – and such a contingent interest was incapable of assignment (paragraphs 26, 93 – 96). The assignment was executed in January 2014, but a Part 36 offer was not made until September that year (paragraph 87).