The case of Forde v Birmingham CC (2009) confirms that a second retrospective CFA can be signed to correct a CFA believed to be defective. Mr Justice Christopher Clarke dismissed the Defendant’s appeal against the decision of Senior Costs Judge Master Campbell who had held that the Claimant’s solicitors could recover their costs under a second, retrospective, CFA which they had asked the Claimant to sign after the Defendants had challenged CFAs similar to the first.

The Claimant’s solicitors had signed a CFA with their Client prior to 1 November 2005, and shortly before the end of the case the Defendant’s challenged the validity of similar CFA’s on other cases. This first CFA did not contain a success fee. On the request of her solicitors the Claimant then signed a second CFA, with a success fee of 100% should the matter reach trial.

It was held by Clarke J that the Claimant’s solicitor’s consideration for the second CFA was to continue acting on behalf of the Claimant where, if the Defendant’s challenge to the validity to the first CFA had been right, they had no obligation to do so. The Claimant’s consideration was a fresh promise to pay under an enforceable CFA, in place of one which the Defendant alleged was unenforceable. There was no bar on CFA’s being retrospective and no reason per se why a retrospective success fee was contrary to public policy. A success fee is subject to assessment by a costs judge and any that are unreasonable can be reduced or disallowed.

It is worth noting that the Claimant’s solicitors included in their letter to their Client an explanation that the legal costs up to that date would be dealt with under the second CFA unless the Court ruled it invalid, in which case they would revert to the first CFA. They also pointed out that the second CFA contained a success fee, whereas the first did not. It was held by the Court that this letter formed part of the retainer and that as the second CFA fell under the post 1 November 2005 regime it was not necessary for the Claimant to sign the letter for it to have contractual effect.

Although in this particular case the Defendant’s had raised a specific challenge with regard the validity of the first CFA before the end of the case, the same reasoning is likely to apply where a solicitor has a reasonable doubt as to the enforceability of a pre 1 November 2005, CFA. In such circumstances it seems a second CFA can be signed and that the post 1 November 2005 rules will apply to that CFA, meaning the solicitors costs and success fee can be retrospectively protected and then recovered. This is a neat solution to any CFA question marks hanging over those older files.

Click here to read the Appeal decision in full.