In the recent judgment of Price v Egbert H Taylor & Company Limited (Birmingham County Court 6 July 2016), the County Court refused to apply the costs protection of QOCS to a claimant after his solicitors wrongly informed the defendants that a CFA was in place three years earlier.
The letter sent by the claimant to the defendant stated:
‘Please be advised that out Client's claim is being funded by way of a conditional fee agreement which provides for a success fee’.
The claimant, bringing an action against his employer, lost, and contended that QOCS should apply as the reference to the CFA was made in error in a letter to the defendants. However, the defendants submitted that the claimant should not be allowed to walk away unscathed from this mistake with costs protection as this was a ‘clear and unequivocal representation’ which the defendants had relied upon.
In doing so the defendant outlined the definition of estoppel by representation at Halsbury’s Laws at 47[307] which states:
‘Where a person has by words or conduct made a clear and unequivocal representation of fact to another, either knowing of its falsehood or with the intention that it should be acted upon, or having conducted himself so that another would, as a reasonable person, understand that a certain representation of fact was intended to be acted upon, and the other person has acted upon such representation and thereby altered his position, an estoppel arises against the party who made the representation, and he is not allowed to .state that the fact is otherwise than he represented it to be’.
It was submitted that this is precisely what had happened in this case. The claimant asserted that there was a precommencement funding arrangement in place and the defendant, as a reasonable person, understood that to be a representation to be acted upon and, inevitably, altered its position based on the representation. As such, the defendant contended that the claimant should not be allowed to subsequently assert that QOCS applied. His Honour Judge Lopez accepted this argument and found that:
‘I accept the submissions made by Mr White in respect of the issue of estoppel. It is, I find, clear that by the letter of the 30th October 2012 the Claimant's solicitor made a clear and unequivocal representation to the Defendant and its solicitors that the Claimant had the benefit of a conditional fee agreement, even giving the additional detail in the letter that the agreement provided for a success fee. Further, it is clear that the Defendant and his solicitors relied upon that representation. Therefore, I find that the Claimant is now estopped from asserting that Qualified One-Way Costs Shifting does not apply’.
The claimant was ordered to pay £5,533 costs of the first hearing and the £8,806 costs of the appeal.
The full judgment can be accessed here.