Solicitors penalized for 'knee jerk reaction' to terminate CFA retainer – not a termination on reasonable notice
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In a decision in the Sheffield District Registry of the High Court the judge has criticised Emerald Law, a firm of Solicitors from Liverpool, in a holiday sickness claim for their "knee jerk reaction" to terminate their CFA retainer with a couple who fell ill on holiday with their six-year old daughter, after they contracted food poisoning from eating in their all-inclusive hotel complex. "It goes without saying," the DJ said, "that peremptory termination of the retainer, which is what I find, is clearly not termination on reasonable notice"
The couple and their child sought advice on their return from holiday and, after 18 months of advice and pre-litigation preparation, representing an investment of costs of around £17,000, proceedings were sent to the court but, at the last minute, the solicitors cancelled the issue fee cheque when they learned that the family had eaten out at a local restaurant two days after falling ill.
But it was the solicitors' lack of enquiry that concerned the Court – "…where there is no subsequent evidence of a note of enquiry…of the circumstances in which they went for food, why it was necessitated, where they went and whether or not it could be said well there needed to be evidence from a doctor to say 'well you cannot simply eat once you have had vomiting and diarrhea and you do need to consume some food'…A decision to terminate is taken…there is no evidence of due consideration to the impact of this evidence upon the case, does it materially affect, does it, therefore, reduce the prospects of success below 51 per cent?"
The Solicitor kept a "staggeringly short note of a telephone call' that effectively ended the retainer. The retainer was 'terminated peremptorily by the solicitors …and it was not as a result of any dishonest or misleading information which would justify the retainer being terminated."
"The fact that this is a knee jerk reaction in my view is enforced by what follows…a demand [for £17,442.48 in total], no breakdown, no draft bill, no information as to how that sum is made up and it is a demand for payment in 14 days…that is an extraordinary letter to write to a client at that stage"
What the solicitor should have done, the Court said, is to take detailed instructions from the client, reconsidered her assessment of the prospects of success, given reasons for it and then come to her decision.
The clients were not held liable for any incurred costs under the terms of the CFA and the solicitors were ordered to pay the costs of the proceedings.
A full copy of the approved judgment can be downloaded below.