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

It seems to me that the hybridity claimed for is misconceived. While it is correct that in Zuberi the Court of Appeal held that a DBA may be only part of the wider retainer or arrangements between the client and representative, in this case the situation is materially different. Counsel’s fees are very different to termination provisions. It is clear from an informed and full reading of Zuberi that Lewison LJ had something very different to determine than the question in this case. The Zuberi issue is set out by Lewison LJ with clarity in para 1:

“1 A client enters into a contract of retainer with solicitors to prosecute a claim. The contract provides that in the event of success the solicitors will be entitled to a share of the recoveries. The client achieves success by means of a settlement of the claim; and the solicitors claim their share. But the contract also contains a clause which says that if the client terminates the retainer prematurely (which she did not), she must pay the solicitors' normal fees and disbursements. Does the existence of that clause invalidate the whole contract? Judge Parfitt held that it did not.”

The Court of Appeal ultimately affirmed the decision of the trial judge. The clause in question was:

“With the exception of the circumstances set out in clause 6.3 . . . you may terminate this Agreement at any time. However, you are liable to pay the Costs and the Expenses incurred up to the date of termination of this Agreement within one month of delivery of our bill to you.”

Therefore, Mrs Zuberi did not terminate early. She relied on the early termination clause to claim that the DBA was unenforceable. The majority of the court (Newey and Coulson LJJ) held that regulation 4 of the 2013 Regulations had no application to provisions in a contract of retainer which dealt with termination of the retainer. Accordingly, if the termination clause was part of the DBA, it did not fall foul of the 2013 Regulations (paras 71-73). However, regulation 1(2) states in unmistakable terms that counsel's fees are included in the payment. There is every good reason for this to be the case. It promotes certainty to the client; it prevents excessive legal costs. These were matters of concern in the evolution of the DBA as a limited exception to the illegality of champerty.

I find for these reasons that the reliance placed on Zuberi is misplaced and the analogy with early termination clauses cannot be drawn. Lewison LJ recognised in terms that his reasoning was not essential to the decision (“Postscript”, para 50) and thus it should not be viewed as integral to the ratio in Zuberi (“I have, since writing the above, had the benefit of reading the judgment of Newey LJ in draft. I agree with him that the underlying policy was to arrive at the result that he has reached.”). The Regulations are clear: counsel’s fees are part of the payment. Thus, payment of counsel’s fees as expenses is unlawful on the face of the delegated legislation that has the force of law. It would appear illogical and wrong in principle that you could contract to do what is otherwise unlawful.

I cannot accept that counsel’s fees were lawfully hived off from the DBAs. The Zuberi argument fails.