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On appeal from: [2015] EWCA Civ 1230

This appeal considered whether the Court of Appeal erred in allowing the respondent solicitors firm’s claim for equitable interference against the appellant insurer to recover its costs under conditional fee agreements after the appellant had compromised the underlying claims directly with the respondent’s clients on terms which did not provide for the payment of the respondent’s costs.

The Supreme Court unanimously dismissed the appeal. The Court held that the client care letter, which explained that the solicitor would be able to recover its costs from the losing side if the claimants won, so that the claimants would not need to put their hands in their own pockets, did not mean that the claimants were not contractually liable for the solicitors’ fees. The Court considered that the requirement that the settlement debts must owe their creation to Edmondson’s services provided to the claimants under the CFAs was satisfied on the facts. As such, the Supreme Court held that, once a defendant or his insurer is notified that a claimant in a road traffic accident case has retained solicitors under a CFA, and that the solicitors are proceeding under the Protocol, they have the requisite notice and knowledge to make a subsequent payment of settlement monies direct to the claimant unconscionable, as an interference with the solicitor’s interest in the fruits of the litigation. Therefore Haven had notice of the lien because they knew that each of the claimants had retained Edmondson under a CFA and so the lien could be enforced against Haven by requiring it to pay the fee amounts in the CFAs direct to Edmondson, but only up to the amount of the agreed settlement payments.

For judgment, please download: [2018] UKSC 21
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (5 Feb 2018 morning session) (5 Feb 2018 afternoon session) (6 Feb 2018 morning session) (6 Feb 2018 afternoon session)