Garrett v Halton Borough Council: CA 16 Mar 2007

The defendants argued that the conditional fee agreement in use by the claimant’s solicitors was void and so in breach of the rules.
Held: In assessing whether there was any ‘interest’ for the purposes of the Regulation, the court looked to the legislative history as an aid to the interpretation of the Regulations, citing the Lord Chancellor’s paper of February 2000 entitled Conditional Fees: Sharing the Risks of Litigation: The Government’s Conclusions Following Consultation were as follows: ‘If the legal representative recommends a particular product, but also has an interest in doing so, for example because he or she will receive a commission or is a member of the insurer’s panel of solicitors, then this must be disclosed to the client’.
Dyson LJ rejected a submission that the word interest in regulation 4(2)(e)((ii) should be construed narrowly so as to mean only a direct financial interest such as commission, ie a direct profit arising from payment of the premium, saying: ‘Nor do we accept that the Regulations should be construed narrowly because of their potentially draconian effect on solicitors. The purpose of the Regulations is to protect clients, not the financial interests of solicitors. In our judgment, the Regulations should be construed by giving the plain language in which they are expressed its normal and natural meaning. We do not accept that the word ‘interest’ is ambiguous. For the reasons that we shall give, it seems to us to be clear that it includes membership of a panel such as the Ainsworth panel.’
For the purposes of regulation 4, a solicitor has an interest if a reasonable person with knowledge of the relevant facts would think that the existence of the interest might affect the advice given by the solicitor to his client.
Lloyd LJ, Dyson LJ, Sir Henry Brooke
[2007] EWCA Civ 278, [2007] 1 WLR 554
England and Wales
See AlsoGarrett v Halton Borough Council CA 18-Jul-2006
. .
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Cited by:
ApprovedTankard v John Fredricks Plastics Ltd; Jones v Attrill etc CA 11-Dec-2008
The defendants sought to argue that the conditional fee arrangement used by the claimant’s solicitors had been void under the 2000 regulations. They claimed that the solicitors had failed to disclose an interest in the policies sold.
Held: No . .

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Updated: 02 February 2021; Ref: scu.250980