Backdating a CFA

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John Holmes   -v-  Alfred McAlpine Homes (Yorkshire)

This case related to an appeal against a decision of a Costs Judge and involved more alleged breaches of the CFA Regulations 2000. 

The interesting thing about this case is that it dealt with the difference between a backdated CFA and a CFA that is retrospective. 

The Claimant had suffered personal injuries as a result of an accident at work on 8th November 1999. The injuries had been serious and the case was settled shortly before a trial on 19th November 2003 when the Claimant accepted the sum of £1,615,000.00 in settlement of his claim.  The Defendants were ordered to pay the Claimant’s costs on a standard basis. 

The attendance note which was before the Court indicated that the CFA had actually been signed on 25th August 2000.  The agreement date, however which was clearly printed on the first page of the agreement, was 15th July 2000.  The agreement provided that the basic charges were “for work done from now until this agreement ends”. 

The Judge held that the natural meaning of “now” is the time when the agreement is signed and that in the absence of explanation from the solicitor that is how the Claimant would have understood the agreement.  For the agreement to have had a retrospective effect it would have had to refer to work done “from the date of this agreement”, or “from the 15th July 2000”. 

The Judge commented that the backdating of documents, as was done in this case, is generally wrong.  He indicated that it is wrong to attempt to give an agreement retrospective effect by backdating it and that if the parties are agreeing that a written agreement should apply to work done before it is entered into, it should be correctly dated with the date upon which it is signed and expressed to have a retrospective effect. 

Interestingly, the Judge indicated that if he had found that the agreement had had retrospective effect he would not have found the failure to explain the retrospectivity to have been material on the basis that the practical effect of the agreement having had effect from 15th July 2000 would have been to remove the client from his liability for costs incurred between 15th July 2000 and 25th August 2000 in the event that his claim failed and that he would have also have been relieved from the liability to fund those costs pending determination of his claim.