Latest news
News and Events

Claiming costs against a defendant not named in CFA

  • Posted

In Engeham v London & Quadrant Housing Ltd & Academy of Plumbing Ltd the Court of Appeal upheld the finding that a consent order and damages paid by a Defendant not named in the CFA was a “win" that entitled the Claimant to recover costs against a Defendant not named in the CFA.

The Claimant in this case was injured when her bathroom ceiling fell on her head. She and her solicitors initially believed that her Landlord was responsible. Accordingly, she entered into a CFA naming her Landlord, London Quadrant Housing Group, as the Defendant. Proceedings were subsequently served against two Defendants: the Landlord and their plumber, the latter of which was not named in the CFA. It was against these two Defendants that the action was settled, with the Second Defendant agreeing to pay £10,000 and the Claimant’s costs. At first instance, it was held that the CFA did not cover costs against the Second Defendant, so a claim for costs against them amounted to a breach of the indemnity principle and the Claimant’s costs were disallowed in their entirety.

On appeal to the Circuit Judge HH Judge Mitchell (sitting with Senior Master Hurst), the wording of the settlement terms was given close attention. It was noted that "the first defendant and second defendant" were considered as having been "discharged from all further liability to the claimant" following payment by the second defendant of the agreed sum and costs." It was further noted that the damages were accepted as settlement of the "claims brought in this actions", suggesting that the action was comprised of two claims against the two defendants.

As such, the Court held that the definition of win in the conditional fee agreement is not restricted to who pays, that the meaning of win should interpreted broadly as “in any way you derive benefit from pursuing the claim,” and that the Claimant had derived said benefit within the terms of her CFA. As such, she was considered to have been liable for costs under the CFA and the appeal was thus allowed.

The Court of appeal upheld the decision of HH Judge Mitchell, opining that it was unrealistic to say that the Claimant had not won, that the Tomlin order was an agreement to pay damages for the purposes of the CFA, and that it was irrelevant that it was the Second Defendant paying the damages instead of the First.

Whilst it is not unusual to have cases where there may be more than one potential Defendant, it is unusual to have cases where the correct Defendant(s) have not been named; this decision will now provide comfort to those solicitors who find themselves in this predicament.  A small victory for Claimant solicitors…