The Importance of Funding Arrangements

The recent case of McDaniel and Co v Clarke [2014] EWCH 3826 (QB) should serve as a reminder to solicitors to inform their clients of all the funding arrangements which may be available to them. The consequence of failing to provide this advice to the client is that the solicitors’ costs may be presumed to be nothing regardless of the amount of work undertaken.

The original action by Clarke, arose from an injury at work. Clarke instructed a firm of solicitors (McDaniel & Co) to represent her in a personal injury claim against her employer. Clarke was a member of a trade union and would have been entitled to free legal representation if her case was believed to have reasonable prospects of success.

The trade union funding was not used and the initial work was funded by way of a Conditional Fee Agreement (“CFA”). Clarke was dissatisfied with the work of McDaniel & Co so she transferred her instructions to another firm of solicitors who subsequently settled the claim for her together with the costs. After settlement of the claim, McDaniel and Co sought payment of its costs.

In assessing whether McDaniel and Co was entitled to recover its costs, the Judge, Master Gordon-Saker, had to determine whether Clarke would have accepted the trade union funding had she been properly advised of it.

The judge found the following:

That it was likely that Clarke would have taken the trade union funding and therefore, her liability under the CFA should not have been incurred;

McDaniel and Co had breached the Solicitors’ Code of Conduct in failing to enquire whether Clarke was a member of a trade union or other similar organisation; and

McDaniel and Co’s costs were unreasonable and therefore, assessed as nil.

The appeal was rejected.

What does this case mean in practice?

A solicitor should inform you of all the appropriate funding arrangements at the outset of the case; and

If you are not properly advised then your solicitor may not be entitled to recover costs.

We regularly receive enquiries from people dissatisfied with the handling of their matter by their previous solicitor and often take over the conduct of litigation from other firms.

If you think you may have a claim against your solicitors in a civil case then contact us today for independent specialist advice.