Dominic Regan explains why he expects the Court of Appeal to confirm the legitimacy of CFA assignment
Can a conditional fee agreement (CFA) between client and original solicitor lawfully be assigned to another firm? This might arise because the old firm decided to close down, went bust or chose to abandon that line of work. Files are acquired and no doubt money would change hands.
Crux of assignment
The crux of assignment is that the new firm seamlessly slides into the shoes of its predecessor.
If an assignment is valid then, in the event of a success, costs in full will be recovered. Old arrangements created prior to 1 April 2013 will bring in base costs and an uplift plus an after-the-event insurance premium.
In just a single case the amount could be considerable. With the ban on injury referral fees, some firms have invested millions in the acquisition of existing files. The logic was that, unlike advertising which can never guarantee an influx of work, buying work in would definitely produce a return provided the claims were decent.
As with so many nightmares in recent years
