I have already commented upon the knots the firm of Candey tied itself in in various cases when the aim of access of justice for a client through alternative means of funding came into conflict with the firm’s own interests. Similar problems have been highlighted by the recent case of Forster v Reynolds Porter Chamberlain [2023] EWHC 1150 (Ch).
Here the solicitors, abbreviated to RPC, were acting for Ms Forster in what was essentially a shareholders’ dispute within the ambit of s 994 Companies Act 1996. She settled the claim by way of a Tomlin order, and she alleged, and the court held, that RPC had assured her that she would receive a guaranteed £350,000 from the receipts from her opponents. The trouble was that they subsequently went bankrupt and she got £50k. The evidence was that she had instructed RPC to enforce the Tomlin order as soon as there was a default by her opponents and they had refused to comply because it was against their own interests. The judge accepted evidence that if they had enforced the Order when instructed, there would have been a 55% chance of recovery and awarded Ms Forster 55% of £350,000. The following horror stories arise from the judgment:
- Conflict of interest in administering the terms of the CFA
- Conflict of interest in arranging a loan for the client from a party well know to RPC for funding disbursements
- Running up staggering fees of £5 million for a claim worth at the very top end £850,000
- Not informing the client of escalating costs
- Kicking the existing expert into touch in favour of a much more expensive Deloitte
- A leader and two juniors at trial.
Part of the problems described above are at the door of the solicitors involved but they are also systematic.
Finally, representing a client under a CFA requires or under funding arrangements requires solicitors to use more care in relation to costs and conflict, not less.