Ghannouchi v Houni Ltd & Ors

Ghannouchi v Houni Ltd & Ors

The CFA did not comply with Regulation 3(2)(c) because it failed to make clear that the client was not liable for the shortfall in base costs as well as the success fee where costs were agreed rather than assessed. However, this breach did not have a materially adverse effect on the protection afforded to the client or the administration of justice, as the costs were determined by detailed assessment and the client was adequately informed. Therefore, the CFA was enforceable and the Claimant was entitled to recover costs.

Parties
Claimant: Rashid Ghannouchi; Defendant: Houni Limited; Defendant: Ahmed Salhin El-Houni; Defendant: Al Arab Publishing House Limited
Jurisdiction
England and Wales
Judgment Date
04 March 2004
Procedural Posture
Costs Assessment (post Trial) / Ruling on Validity of Conditional Fee Agreement and Assessment of Costs
Outcome
CFA enforceable; costs recoverable by Claimant
Legal Topics
Conditional Fee Agreements, Success Fees, Indemnity Principle, Detailed Assessment of Costs, Interpretation of Statutory Instruments
Civil Procedure Costs Law Conditional Fee Agreements Success Fees Indemnity Principle Detailed Assessment of Costs Interpretation of Statutory Instruments

Case Brief

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Parties

Rashid Ghannouchi

Claimant

Houni Limited

Defendant

Ahmed Salhin El-Houni

Defendant

Al Arab Publishing House Limited

Defendant

Procedural Posture

Costs Assessment (post Trial) / Ruling on Validity of Conditional Fee Agreement and Assessment of Costs

Legal Issues

  1. 1 Whether the Claimant's Conditional Fee Agreement (CFA) complied with Regulation 3(2)(c) of the Conditional Fee Agreements Regulations 2000
  2. 2 Whether any breach of the Regulations rendered the CFA unenforceable due to a materially adverse effect on the protection afforded to the client or the administration of justice
  3. 3 Whether the written and oral explanations provided to the client satisfied Regulation 4 of the Regulations

Ratio Decidendi

The CFA did not comply with Regulation 3(2)(c) because it failed to make clear that the client was not liable for the shortfall in base costs as well as the success fee where costs were agreed rather than assessed. However, this breach did not have a materially adverse effect on the protection afforded to the client or the administration of justice, as the costs were determined by detailed assessment and the client was adequately informed. Therefore, the CFA was enforceable and the Claimant was entitled to recover costs.

Court Disposition

CFA enforceable; costs recoverable by Claimant

Orders

  • Claimant entitled to recover costs under the CFA, subject to detailed assessment
  • No materially adverse effect found; no penalty imposed for technical breach of Regulation 3(2)(c)