Dix v Townend & Anor

Dix v Townend & Anor

The uncapped indemnity clause in the CFA creates an unacceptable financial stake for the solicitor, tending to corrupt the due administration of justice and offending public policy. The agreement is unenforceable on public policy grounds, but is not rendered unenforceable as an unauthorised contract of insurance under FSMA, as its principal object is legal representation, not insurance.

Parties
Claimant: John Dix; First Defendant: Declan Townend; Second Defendant: Frizzell Financial Services
Jurisdiction
England and Wales
Judgment Date
30 June 2008
Procedural Posture
Costs Assessment / Reserved Judgment on Preliminary Points
Outcome
Claimant's retainer declared unenforceable on public policy grounds; Second Defendant's insurance objection dismissed.
Legal Topics
Champerty, Maintenance, Conditional Fee Agreements, Insurance Regulation, Public Policy
Civil Procedure Legal Costs Professional Ethics Champerty Maintenance Conditional Fee Agreements Insurance Regulation Public Policy

Case Brief

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Parties

John Dix

Claimant

Declan Townend

First Defendant

Frizzell Financial Services

Second Defendant

Procedural Posture

Costs Assessment / Reserved Judgment on Preliminary Points

Legal Issues

  1. 1 Whether a solicitor's indemnity clause in a CFA is unlawful at common law for champerty or maintenance
  2. 2 Whether such a retainer is unenforceable as an unauthorised contract of insurance under the Financial Services and Markets Act 2000

Ratio Decidendi

The uncapped indemnity clause in the CFA creates an unacceptable financial stake for the solicitor, tending to corrupt the due administration of justice and offending public policy. The agreement is unenforceable on public policy grounds, but is not rendered unenforceable as an unauthorised contract of insurance under FSMA, as its principal object is legal representation, not insurance.

Court Disposition

Claimant's retainer declared unenforceable on public policy grounds; Second Defendant's insurance objection dismissed.

Orders

  • Claimant's retainer declared unenforceable on public policy grounds.
  • Second Defendant's objection regarding unlawful insurance dismissed.