Mohammed Azim v Tradewise Insurance Services Ltd [2016] EWHC B20 (Costs)

The Claimant, who was injured in a road traffic accident and pursued a personal injury claim, accepted a Part 36 offer of £3,500 from the Defendant. He had been represented by three firms of solicitors. A Conditional Fee Agreement into which the Claimant had entered with the second set of solicitors (TLW Solicitors) in January 2013 was assigned to the third set of solicitors (Russell Worth Ltd) in July 2014 after TLW had written to the Claimant explaining the reasons for the transfer. At detailed assessment, the Defendant took issue with the validity of that assignment and therefore the Claimant’s right to recover any costs under it. The questions for Master Leonard were whether the Claimant’s retainer with TLW had been terminated at the time of the assignment arrangement; whether it was lawfully possible for the CFA to be assigned in the manner attempted; and whether the assignment was effective.

HELD: In relation to whether the retainer had been terminated, the case was distinguished from Budana v Leads Teaching Hospitals NHS Trust (District Judge Besford, County Court at Kingston-Upon-Hull, 4 February 2016) and Webb v London Borough of Bromley (SCCO, 18 February 2016). On analysis, there was no evidence the TLW CFA had been or was terminated by TLW at the time of the assignment. In relation to the assignment’s legality, there was no identifiable obstacle in the principles governing assignment of the benefit and burden of contracts to the validity of a bona fide, arms-length CFA assignment in the circumstances of the case: Jones v Spire Healthcare Ltd (HHJ Graham Wood QC, Liverpool County Court, 11 May 2016) considered. The assignment was found to be effective and a novation did not take place. It followed that the indemnity principle did not operate to prevent the recovery of the costs incurred by the Claimant and payable both to TLW and Russell Worth Ltd under the terms of the TLW CFA.