CFA Challenges following the Court of Appeal Decision in Garrett
Posted: 12/09/06
Rather than provide the required degree of clarity it appears that the Judgement in Garrett has resulted in a further state of confusion and uncertainty.
Under the previous CFA Regulations a Claimant’s Solicitor was obliged to declare an “interest” in recommending a particular insurance policy. Failure to do so resulted in the CFA being invalid, and as the retainer was defective, no costs would be recoverable.
Whilst the Claimant in the Garrett case argued that the requirement for a declaration was to maintain consumer protection, the Court believed it immaterial whether the absence of a declaration had any adverse effect upon the consumer. The breach itself was enough to defeat the CFA.
Unfortunately the meaning of an “interest” has been left to Judicial interpretation, and Garrett has not offered the industry any real assistance in defining what types of interest might be relevant. The majority of Practitioners will have assumed that “interest” means something rather more obvious, like a commission payment or pecuniary advantage, but it appears that the definition is very much wider in scope.
