KA-2025-000017 - [2025] EWHC 2311 (KB)

In their skeleton argument, the appellants submit that if the charging of counsel's fees as expenses was against the Regulations, such a breach would not be material. Further, such breach does not inevitably lead to a finding that each DBA is unenforceable. The test is set out in the well-known case of Hollins v Russell [2003] 1 WLR 2487, where at para 107 the court said that the question is whether or not the breach “had a materially adverse effect either upon the protection afforded to the client or upon the proper administration of justice.” The Court of Appeal examined the need for strict enforcement in the context of material breach in Garrett at para 31:

“31 The only mitigation of this strict approach is that, as was made clear in Hollins v Russell, the breach must be material in the sense described at para 107 of the judgment. Thus, literal but trivial and immaterial departures from the statutory requirements did not amount to a failure to satisfy the statutory conditions. It is unnecessary to decide whether the test stated at para 107 was no more than an application of the principle that the law is not concerned with very small things.”

In the appellants skeleton argument (para 74), it was submitted that if the parties have “struck a deal” treating counsel's fees as expenses, that is not a material breach of the regulations. The respondent disputed that such breaches were immaterial. While the respondent made submissions doubting whether may properly read across the relevance of materiality in CFA cases, it became unnecessary for me to resolve these matters because during the course of oral argument the appellants conceded that their materiality submission was “difficult” to sustain. This must be right. Charging counsel’s fees is a clear and obviously material breach of the Regulations. The appellants were correct not to maintain the materiality argument.