The Court of Appeal has given a helpful ruling on CFA’s entered into before 1st of November 2005. The CFA Regulations were repealed after this date, so none of the points in this decision are relevant to CFAs signed after that date, but this decision may be very helpful in 'saving' pre 1st November 2005 CFAs which are being challenged on the basis of a breach of the 2000 Regulations. Solicitors faced with such a challenge should look carefully at the entirety of their agreement with the client, to see whether, in reality, a CFA Lite has been formed.

The Court of Appeal made this ruling in the case of Jones v Wrexham Borough Council. It was held that the Claimant's solicitor had breached Regulation 4 (2) (e) (in respect of a CFA signed prior to 1 st November 2005) by not disclosing that they had an interest in the ATE insurance policy which they had recommended, but:

1) The Conditional Fee Agreement (Miscellaneous Amendments) Regulations 2003 (“CFA Lite”) did not require compliance with Regulation 4 (2) (e), so if the agreement with the client was in reality a CFA Lite (broadly that the client would not normally have to pay any costs beyond what was recovered from the Defendant) then the CFA would be enforceable

2) This was true even if the solicitor hadn't intended to specifically draft a CFA Lite and had used an old style “normal” CFA, because crucially the Court would look not only at the CFA, but also at the Client Care Letter and surrounding documentation in order to construe the real agreement with the client.

3) Contrary to the Defendant's submissions, an agreement was not prevented from being a CFA Lite simply because the client might have responsibility for costs in order to make a valid claim for costs under an ATE policy.

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