Can you assign your CFA?

This is an important question that we still find being raised by our clients.

The Assignment of a CFA may become necessary when for instance:

–  a solicitor moves firms and some of his clients wish to follow him,

–  the firm merges with another

–  the firm becomes an LLP.

In Jenkins v Young Brothers Transport Ltd [2006] EWHC 151 (QB); [2006] 1 WLR 3189 the court held

“that the general rule that a benefit could be assigned but that a burden could not was subject to a limited exception where the exercise of a right was expressly or impliedly conditional on the performance of a covenant and the performance of the covenant was related to the right;

that the benefit of being paid was conditional upon and inextricably linked to the meeting by the original firm of solicitors of its burden of ensuring to the best of its ability that the claimant succeeded in his claim; and

that, accordingly, both the benefit and the burden of the conditional fee agreement could be assigned as an exception to the general rule”.

This is an important decision because had it been found there could be no lawful assignment of a CFA then it would have been necessary to enter into a completely fresh funding agreement with the client.

However, it should also be borne in mind that the court’s attitude could well have been different had the Claimant been transferring from firm to firm but without the same solicitor.

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