The long awaited judgment of Budana v The Leeds Teaching Hospitals NHS Trust and The Law Society (Intervener)  EWHC Civ 1980 was handed down by the Court of Appeal on Tuesday.
The appeal was allowed. The Court overturned the decision that the CFA had been terminated. Albeit, divided on opinion regarding whether the CFA was assigned or novated, the Court came to a conclusion which was “just, pragmatic and sensible, given the context”.
LJ Gloster and LJ Beatson, in a two to one majority, found that the “transfer” arrangements resulted in a novated contract. The Court unanimously held, however, that the success fee was payable pursuant to the transitional provisions, namely, section 44 (6) of LASPO. The Court referred to the comments of Lord Sumption in Plevin, wherein he stated that, “the purpose of the transitional provisions of LASPO, in relation to both success fees and ATE premiums, is to preserve vested rights and expectations arising from the previous law. That purpose would be defeated by a rigid distinction between different stages of the same litigation”. Similarly, LJ Gloster followed “that purpose would be defeated by an over technical application of the doctrine of novation so as to prevent any litigant, who had begun a claim under a CFA prior to 1 April 2013, from recovering costs in respect of a success fee, simply because a novation had occurred as a result of a change in the constitution of the firm of solicitors acting for her, or as a result of conduct of her claim being transferred, for whatever reason, to a new firm of solicitors”. It is apparent that a common sense approach has been adopted in this case. The intention of the parties was clear and, therefore, the Court saw “no difficulty in construing section 44 to give effect to that intention”.
LJ Davis also concluded that the appeal should be allowed, however, he was of the view that the CFA had been assigned. He considered the conclusion reached in the case of Jenkins to have been decided correctly. He also referred to the case of Plevin and, in particular, to the fact that the Court, in that case, had expressly rejected an argument that the CFA was not assignable. Unfortunately, that point was not further challenged in the Supreme Court… (there’s still time!). He also pointed out that the critical point was the interpretation of the contractual arrangements in question: Tolhurst v Associated Portland Cement  AC 414. He stated, “I do not myself see why, where all three parties concerned – claimant, BR (Baker Rees) and NH (Neil Hudgell) – plainly intended and agreed that there should be an assignment so as to preserve the BR CFA and so as not to create a wholly new, replacement, contract that that should be regarded as being, in effect, incapable of achievement”. It would be “unduly restrictive” to deny the parties the effect of what they intended. Again, LJ Davis reached a sensible view point. He held that “an overall conclusion in favour of the defendant would appeal to no sense of the merits. It would mean that the claimant will be deprived of costs to which she might ordinarily expect to have been entitled. It would mean that the defendant is absolved from paying those costs by virtue of adventitious technicality”.
It appears, in this instance, that the Court of Appeal has taken into consideration the wider implications of such a decision and has sought to take a logical and practical approach. Times are changing as is the common law… the Court does not seem to be interested in a stringent and narrow approach to the interpretation of statute. If the Supreme Court shares the same view it seems a further appeal may be futile.