Law report: Conditional fee agreement poses no special risk

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Hodgson and others v Imperial Tobacco Ltd and others; Court of Appeal, Civil Division (Lord Woolf, Master of the Rolls, Lord Justice Aldous and Lord Justice Chadwick) 12 February 1998

A lawyer acting under a conditional fee agreement was at no greater risk of being personally liable for the costs of an action than one acting under any other fee arrangement. Proceedings in chamber were not, generally, secret, and save in the exceptional cases where they were secret, disclosure of judgments or orders and comments on proceedings in chambers was not improper.

The Court of Appeal dismissed the appeal of the plaintiffs in litigation against cigarette manufacturing companies against the refusal of an order debarring the defendants from seeking an order that the plaintiffs' legal representatives be responsible for the costs of the action, but allowed the plaintiff's appeal against an order preventing the parties and their advisers from commenting to the media about the litigation without leave of the court.

Approximately 43 plaintiffs claimed damages from the defendants, alleging that the cancer from which they suffered was caused by smoking cigarettes. They had been refused legal aid, and had entered into conditional fee agreements (CFAs) with their legal advisers. At a directions hearing in chambers on 10 October 1997 the plaintiffs' legal advisers, concerned at the risk that they might be personally liable for costs in a case where the plaintiffs were not insured, indicated that unless they had certainty as to any such liability it would not be possible for them to continue to represent the plaintiffs. They accordingly sought the "debarring" order, which was refused. The judge did, however, make the "gagging" order.

Daniel Brennan QC, Brian Langstaff QC, Robin Oppenheim and Richard Hermer (instructed by Leigh, Day & Co) for the plaintiffs; Jonathan Playford QC, Andrew Prynne QC, Charles Gibson and Toby Riley-Smith (instructed by Ashurst Morris Crisp) for the first defendant; Justin Fenwick QC, Janet Turner QC and Tom Weitzman (instructed by Simmons & Simmons) for the second and third defendants.

Lord Woolf MR said that there was no reason why the circumstances in which a lawyer acting under a CFA could be made personally liable for the costs of a party other than his client should differ from those in which a lawyer who was not acting under a CFA would be so liable.

The plaintiffs' lawyers were in no different position than if they had been acting for a legally aided client with a nil contribution. In that case the plaintiff's lawyers would be an equally prominent target for an application that they pay the costs personally. There did not appear to be any precedent for for lawyers acting for a legally aided client seeking a debarring order. There was no doubt that the judge had been right to refuse to make the order.

The present litigation was of great interest to the media. In accord with the usual practice in the Queen's Bench Division, interlocutory directions for the conduct of the litigation had been made in chambers. The defendants relied on that fact in support of the "gagging" order.

The public had no right to attend hearings in chambers because of the nature of the work transacted in chambers and because of the physical restrictions on the room available, but, if requested, permission to attend should be granted where practical. What happened during proceedings in chambers was private, not confidential or secret, and information about such proceedings could, and the judgment or order pronounced should, be made available when requested. If members of the public who sought to attend could not be accommodated, the judge should consider adjourning the proceedings in whole or in part into open court, or allowing one or more representatives of the press to attend the hearing in chambers.

To disclose what occurred in chambers did not constitute breach of confidence or amount to contempt as long as any comment which was made did not substantially prejudice the administration of justice. The above did not apply to the exceptional situations identified in s 12(1) of the Administration of Justice Act 1960 or where the court, with the power to do so, ordered otherwise. In the present case the risk of the administration of justice being interfered with by communications with the press was far less than the risks which would follow from interference with the entitlement of the media to obtain information about the proceedings. The judge had accordingly been wrong to make the "gagging" order.

Kate O'Hanlon, Barrister