The Court of Appeal (Arnold LJ giving judgment) today found that the rules of champerty remained in full force in respect of solicitors. Unless the solicitor’s interest in litigation was as a result of an enforceable fee agreement (i.e. a lawful CFA or DBA), the agreement between solicitor and client was champertous and unenforceable, no matter what form it took. However, the real interest in the judgment is the Court’s identification of a separate rule that a solicitor can never take an assignment or otherwise obtain an interest in his or her client’s cause of action, not by reason of the champerty rule, which is designed to protect the opposing party in litigation, but because solicitors have fiduciary obligations to their client and would be in breach of the no-conflict duty by obtaining an interest in the client’s property. In the light of this reiteration of a solicitor’s fiduciary obligations in respect of fee arrangements, solicitors should carefully consider, when discussing a change in fee agreement with an existing client (e.g. from a normal retainer to a CFA) whether it is necessary to refrain from giving any advice about fees and to require the client to obtain independent legal advice.
Jonathan Cohen QC appeared for the successful Respondent. The Appellant, London law firm Candey, has sought permission to appeal to the Supreme Court.
Please click here to view the judgment.