The case of Sellers v Simpkins [2023] EWHC 3296 (SCCO) has brought to light important considerations regarding the termination of a Conditional Fee Agreement (CFA) by a client. The judgment, delivered by Senior Costs Judge (SCJ) Gordon-Saker, provides valuable lessons for clients and lawyers alike.

The Case

In this case, Steven Simpkins, formerly practicing as Simpkins & Co in Hampshire, acted for the claimant after she was seriously injured in a road accident. The CFA was signed in May 2015, and no success fee was payable under the agreement, which was a CFA Lite. In March 2021, the claimant terminated the retainer and instructed another firm. The claim was settled in August 2021.

The Judgment

The SCJ ruled that a solicitor whose CFA was terminated by the client can charge costs in excess of the amount recovered from the defendant in the underlying proceedings. The SCJ held that “the overall cap does not apply where the solicitor elects to claim their charges before the conclusion of the claim.”

Summary

For Clients Terminating a CFA

Clients should be aware that if they terminate a CFA, they may be required to pay the previous solicitor’s costs under the CFA. This could potentially be in excess of the amount recovered from the defendant in the underlying proceedings.

For Lawyers Whose Clients Have Terminated a CFA

Lawyers whose clients have terminated a CFA should be aware that they can elect to claim their charges before the conclusion of the claim. This could potentially allow them to recover costs in excess of the amount recovered from the defendant in the underlying proceedings.

For Lawyers Advising a Client Who Has Terminated a CFA

Lawyers advising a client who has terminated a CFA should be aware of the potential for their client to be liable for costs in excess of the amount recovered from the defendant. They should ensure that their client is fully informed of this potential liability before proceeding.

Conclusion

The judgment in Sellers v Simpkins [2023] EWHC 3296 (SCCO) provides important guidance for clients and lawyers regarding the termination of a CFA. It highlights the potential for significant costs liabilities and underscores the importance of clear communication and understanding between clients and their lawyers.