Senior Courts Costs Office

No.22 of 2006

Garrett v Halton and Myatt v National Coal Board [2006] EWCA Civ 1017

18 July 2006

Brooke, Dyson & Lloyd LJJ

This appeal concerned an examination of Regulation 4(2)(c) of the CFA Regulations in Myatt and Regulation 4(2)(e)(ii) in Garrett which applied to CFAs entered into before 1 November 2005. A related question was whether the enforceability of a CFA was to be judged by reference to the circumstances existing at the time it was entered into, or by reference to the circumstances known to exist at the time when the question arose for decision (paragraph 7).

Regulation 4(2)(c) did not require solicitors slavishly to follow Sarwar v Alam [2001] EWCA Civ 1401. The court set out a non-exhaustive list of relevant factors which are relevant to the steps that a solicitor should reasonably take in discharging his Regulation 4(2)(c) duty, (see paragraphs 71 to 76). In Myatt, the solicitors had asked themselves the wrong question, and accordingly the CFA was unenforceable.

In Garrett the Court of Appeal considered whether the solicitors had an interest in recommending insurance which was discloseable under Regulation 4(2)(e)(ii). The CFA was unenforceable because the client was not told whether, in fact, the solicitor had an interest in recommending the particular insurance contract in question. This was so even though the solicitors did not earn commission on the sale of the policy; the fact that they might have lost their place on the claims managers’ panel if they had not made the recommendation was a discloseable interest.