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England and Wales Court of Appeal (Civil Division) Decisions

You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Gavin Edmondson Solicitors Ltd v Haven Insurance Company Ltd [2015] EWCA Civ 1230 (02 December 2015)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2015/1230.html
Cite as: [2015] EWCA Civ 1230, [2016] RTR 6, [2016] WLR 1385, [2015] RTR 125, [2015] WLR(D) 496, [2016] 1 WLR 1385, [2016] CP Rep 11

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Neutral Citation Number: [2015] EWCA Civ 1230
Case No: A3/2014/3635(A) & A3/2014/3635


Royal Courts of Justice
Strand, London, WC2A 2LL

B e f o r e :



Gavin Edmondson Solicitors Limited
- and -

Haven Insurance Company Limited


Lesley Anderson QC and Martin Budworth (instructed by Gavin Edmondson Solicitors Limited) for the Appellant
Lord Marks QC and James Wibberley (instructed by Flint Bishop Solicitors) for the Respondent

Hearing date : Wednesday 11th November 2015



Crown Copyright ©


  1. This is an appeal by Gavin Edmondson Solicitors Limited ("Edmondson") against the Order of His Honour Judge Jarman QC dated 20 August 2014, dismissing Edmondson's claim against Haven Insurance Company Limited ("Haven") in respect of Haven's conduct in settling on an inclusive basis personal injury claims directly with six clients of Edmondson ("the claimants") with whom Edmondson had concluded conditional fee agreements, thereby depriving Edmondson of its costs.
  2. Edmondson alleges that Haven's conduct was unlawful on the following grounds.
  3. (1) Haven wrongfully prevented Edmondson from establishing a lien on the settlement sums for their costs, thereby justifying equitable intervention by the court with the disposal of damages and costs by ordering Haven to pay Edmondson's costs.

    (2) Haven induced breaches of contract between Edmondson and its clients.

    (3) Haven is liable in tort for intentionally causing loss to Edmondson by unlawful means, those means being:

    (a) breach of the Pre-action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents ("the Protocol");
    (b) misuse of confidential information; and
    (c) breach of the Data Protection Act 1998.
  4. For its part, Haven denies any impropriety and maintains that there is nothing in law to prevent a direct offer of compensation being made in such circumstances. It submits that the claim discloses no valid cause of action.
  5. The Protocol

  6. The underlying claims all fall within the Protocol, which was first published in March 2010 and which applies where a claim for damages arises from a road traffic accident, the claim includes damages in respect of personal injury and the claimant values the claim at not more than £10,000 on a full liability basis including pecuniary losses but excluding interest. The Protocol describes in great detail the behaviour the court will normally expect of parties, of their legal representatives and of the parties' insurers, involved in such claims. Under the Protocol scheme parties, lawyers and insurers, when required to send information to one another, are expected to do so electronically through a website ("the Portal") established by road accident insurers. While notice of claims falling within the Protocol is expected to be given in accordance with the procedures set out in the Protocol, they are not mandatory. However, there are possible costs consequences if qualifying claims are not processed in accordance with the Protocol.
  7. The preamble to the Protocol states:
  8. "2.1 This Protocol describes the behaviour the court will normally expect of the parties prior to the start of proceedings where a claimant claims damages valued at no more than £10,000 as a result of a personal injury sustained by that person in a road traffic accident."

    The aims of the Protocol are set out in paragraph 3.1.

    "3.1 The aim of this Protocol is to ensure that
    (1) the defendant pays damages and costs using the process set out in the Protocol without the need for the claimant to start proceedings;
    (2) damages are paid within a reasonable time; and
    (3) the claimant's legal representative receives the fixed costs at the end of each stage in this Protocol."

    Claims which no longer continue under the Protocol cannot subsequently re-enter the process. (Paragraph 5.11)

    The process is initiated by the completion of the Claim Notification Form ("CNF"). Paragraph 6.1 provides:

    "6.1 The claimant must complete and send -
    (1) the CNF to the defendant's insurers; ..."

    The Protocol makes provision for response by the insurer as follows:

    "6.10 The defendant must send to the claimant an electronic acknowledgment the next day after receipt of the CNF;
    6.11 The defendant must complete the "Insurer Response" section of the CNF ("the CNF response") and send it to the claimant within 15 days;

    6.15 The claim will no longer continue under this Protocol where the defendant, within the period in paragraph 6.11 or 6.13
    (1) makes an admission of liability but alleges contributory negligence (other than in relation to the claimant's admitted failure to wear a seat belt);
    (2) does not complete and send the CNF response;
    (3) does not admit liability; or
    (4) notifies the claimant that the defendant considers that
    (a) there is inadequate mandatory information in the CNF;
    (b) if proceedings were issued, the small claims track would be the normal track for that claim."
  9. The Protocol makes provision for fixed costs to be paid at specified points. Paragraph 6.18 makes provision for Stage 1 fixed costs.
  10. "6.18 Except where the claimant is a child, the defendant must pay the Stage 1 fixed costs in rule 45.29 where
    (1) liability is admitted; or
    (2) liability is admitted and contributory negligence is alleged only in relation to the claimant's admitted failure to wear a seat belt,
    within 10 days after sending the CNF response to the claimant as provided in paragraph 6.11 or 6.13"
  11. If the claim proceeds to Stage 2, the Protocol requires a Stage 2 Settlement Pack including a medical report to be sent to the defendant within 15 days of the claimant approving a final medical report and agreeing to rely on it. (Paragraph 7.26). There is a 35 day period for consideration of the Stage 2 Settlement Pack by the defendant (Paragraph 7.28).
  12. Paragraph 7.37 provides:

    "7.37 Any offer to settle made at any stage by either party will automatically include, and cannot exclude -
    (1) the Stage 2 fixed costs in rule 45.29;
    (2) an agreement in principle to pay disbursements;
    (3) a success fee in accordance with rule 45.31(1). "

    Paragraph 7.40 provides in respect of Settlement:

    "7.40 Except where the claimant is a child or paragraphs 7.41 and 7.42 apply, the defendant must pay -
    (1) the agreed damages less any
    (a) deductible amount which is payable to the CRU; and
    (b) previous interim payment;
    (2) any unpaid Stage 1 fixed costs in rule 45.29;
    (3) the Stage 2 fixed costs in rule 45.29;
    (4) the relevant disbursements allowed in accordance with rule 45.30; and
    (5) a success fee in accordance with rule 45.31 for Stage 1 and Stage
    2 fixed costs,
    within 10 days of the end of the relevant period in paragraphs 7.28 to 7.30 during which the parties agreed a settlement."
  13. Part 36 CPR, Offers to Settle, has been amended to take account of the Protocol. Part 45 CPR, Fixed Costs, makes specific provision for costs under the Protocol scheme.
  14. The Portal

  15. The General Conditions of Use for Portal Users provide:
  16. "The General Conditions of Use set out the terms and conditions on which You may access and use the Portal…
    These General Conditions of Use are legally binding on all users of the Portal to the extent applicable depending on your method of access… Please click the "I agree" box to confirm your acceptance of them. You will not be able to proceed on the Portal unless you agree to be bound by these General Conditions of Use."
    Condition 2 provides
    "2.1 By using the Portal, You agree, … that
    (p) You will use the Portal only:
    i) for the purpose of communicating in accordance with the Protocol and the Civil Procedure Rules; and
    ii) in accordance with all applicable laws, these General Conditions of Use and the User Guide; …
    Condition 15 provides;
    "All Confidential Information disclosed by one party to the other party under these General Conditions of Use or passed or transmitted via the Portal shall be kept secret by the receiving party and shall be used by the receiving party only for purposes contemplated in these General Conditions of Use. The receiving party agrees that it will not reveal, publish or otherwise disclose the Confidential Information of the disclosing party to any third party without the prior written consent of the disclosing party, except that each party may disclose Confidential Information to its Affiliates, agents and professional advisers or as necessary in the performance of the Agreement or operation of the Portal and to comply with any requirement of the courts, police or regulatory entity requiring such disclosure."

    Factual Background

    Ainsley Tonkin

  17. Mr. Ainsley Tonkin was involved in a road traffic collision on 10 April 2012. Haven's insured was also involved in the collision and on the 12 April 2012 Haven, having obtained Mr. Tonkin's contact details from its insured's accident report form, contacted Mr. Tonkin concerning a hire vehicle. On 16 April 2012 Mr. Tonkin entered into a conditional fee agreement ("CFA") with Edmondson and on 17 April 2012 the case entered the Portal. On 20 April 2012 Mr. Tonkin telephoned Haven asking "where they go from here". He was told by Louise Richardson of Haven:
  18. "…What we can do is offer you a scheme to compensate you for your injury. We can work out a sum of money and you can put it into your account as soon as you agree on that figure"

    Mr. Tonkin told Ms. Richardson that he had his insurance solicitor and volunteered the information that there was a 14 day cooling off period. They then negotiated on the telephone and Ms. Richardson offered £2,200. She said:

    "So the offer stands at the moment at two thousand two hundred pounds and obviously [indecipherable] think about it but if you do ask your solicitors they will tell you that they can get you more … but at the end of the day that offer will come from myself and we through solicitors we have to pay solicitor costs as well."

    Mr. Tonkin replied that he fully understood that and went on to raise other matters. They eventually negotiated a settlement at £2,350. Mr. Tonkin asked what he should do about the solicitors he had instructed. Ms. Richardson said he should just call them and tell them that he did not want to deal with them any more and they could just close the claim. On 23 April 2012 Haven sent a written offer of settlement to Mr. Tonkin who on 24 April 2012 completed and signed the "mandate of acceptance" which was returned to Haven on 26 April. The mandate of acceptance confirmed that the offer was accepted:

    "in full and final settlement of my claim for Pain, Suffering & Loss of Amenity in respect of injuries sustained and any financial losses incurred in relation to the road traffic accident."

    Michael Wheater, Dale Makey, Saul Mohsin and Rose Lunt.

  19. On 23 June 2012, Mr. Michael Wheater, Mr. Dale Makey, Mr. Saul Mohsin and Ms. Rose Lunt were all travelling in the same vehicle when it was involved in a road traffic accident. On 20 July 2012 all four entered into CFAs with Edmondson and on 23 July 2012 their cases entered the Portal. On 24 July 2012 Haven sent to each of them a letter containing an offer of settlement. On 7 August 2012 Mr. Mohsin telephoned Mr. O'Connell of Haven who told him that "we offer services if you want to come to us to avoid going to the solicitors". Mr. Mohsin explained that he had actually gone to some solicitors but he was concerned that it was going to take a long time to get everything settled. Later that day Mr. Mohsin telephoned Haven again with the news that he had spoken to Mr. Wheater, Mr. Makey and Ms. Lunt and that they were all going to accept the offer. On the same day Mr. Mohsin sent an e-mail enclosing mandates of acceptance completed by all four claimants.
  20. Daniel Grannell.

  21. Mr. Daniel Grannell was involved in a road traffic accident on 30 August 2012. On the following day he entered into a CFA with Edmondson and his case entered the Portal that day. On 10 September 2012 Haven sent Mr. Grannell a letter offering to settle the claim for £1,900. On 14 September 2012 Haven received a completed mandate of acceptance signed by Mr. Grannell on 13 September 2012. Thereafter an impostor claiming to be Mr. Grannell spoke by telephone with Haven and the compensation was paid to an account on his directions. When Mr. Grannell subsequently contacted Haven, Haven became aware that it had been defrauded. In a telephone conversation on 6 November 2012 Mr. Grannell stated that the mandate of acceptance dated 13 September 2012 was genuine. Mr. Ralph McClaren of Haven told him that the offer of £1,900 was still on the table and that he could arrange for that to be paid at once. Mr. Grannell replied that he would love that. Mr. McClaren then said that he would contact Edmondson and tell Edmondson what they had done. He then added:
  22. "As I say they'll probably when you speak to them they'll probably will tell you not to ya know or you shouldn't do that but for the to be honest with you if when they call you probably a bit less the reason we offer you a bit more is because of the fact the solicitors get kept out of it so we don't have to pay their fees that's basically it."

    Mr. Grannell said he was absolutely happy with that.

    The Judgment Below.

  23. The trial of this action took place before His Honour Judge Jarman QC at Wrexham on 11 and 12 August 2014 and on 13 August he delivered his judgment.
  24. (1) On the basis of Khans Solicitors (a firm) v Chifuntwe [2013] EWCA Civ 481; [2014] 1WLR 1185 he considered that equity would intervene to protect a solicitor's claim on funds recovered or due to be recovered by a client or former client if the paying party is colluding with the client to cheat the solicitor of his fees or the paying party is on notice that the other party's solicitor has a claim on the funds for outstanding fees.

    (a) In order to establish collusion, both parties to the agreement must have the aim of keeping the settlement sum away from the solicitors in order to cheat them out of their fees. He found that Haven clearly intended to avoid paying the solicitors' costs which it would have had to do if the claim had proceeded through the Portal. However, in his view there was no sufficient evidence from which to infer that any of the claimants had any aim other than to achieve a speedy settlement.
    (b) So far as notice was concerned, Edmondson had submitted that Haven knew of the CFAs and was therefore on notice of Edmondson's entitlement to costs. The aim of the Protocol was to ensure that a defendant paid the claim and fixed costs. An insurer who contacted the claimant directly using information received through the Portal knew it might have to pay such costs. However, the judge considered that this knowledge was insufficient to amount to the notice contemplated in Khans. In the judge's view there was no evidence that, or from which it could be inferred that, Haven knew of the contractual terms as to payment between the claimants and Edmondson, other than whether the cooling off period had expired. The judge also considered that all of the clients came to a settlement at a time when his or her CFA with Edmondson was cancellable.

    (2) The judge rejected the claim founded on inducing a breach of contract. First, Edmondson had failed to establish any breach of the contracts between it and its clients. Secondly, the judge was not satisfied that Haven knew of the terms of the retainers or that it knowingly induced any breach of contract.

    (3) The judge also rejected the claim founded on causing loss by unlawful means. In the judge's view there were here no unlawful means. First, the judge did not accept that there was a breach of the Protocol. The Protocol was not mandatory and, despite possible adverse costs consequences for failure to use it, that did not render its non-use unlawful. Secondly, there was no misuse by Haven of confidential information. The information was provided on behalf of the claimant to the insurer of an opposing litigant for the purposes of bringing a claim and the use made by the insurer of such information was to settle such claims to the satisfaction of the claimants. Thirdly, there was no breach of the Data Protection Act 1998. The claimants had given explicit consent to the processing and it was necessary for the administration of justice within the meaning of Schedule 2 and Schedule 3 of that Act.

    The Appeal.

  25. Edmondson now appeals to this court, by leave of the judge, on the issue of equitable intervention. Permission to appeal was not granted on grounds relating to the other heads of claim but the application for permission to appeal was renewed before us at the hearing of the appeal.
  26. At the hearing of the appeal we invited the parties to address the issue of notice. We heard full and helpful submissions on this issue which occupied almost the whole of the single day allowed for the hearing of the appeal. At the conclusion of the hearing we informed counsel that we would consider the position which had been reached and, if necessary, would hear further argument on the other issues.
  27. Edmondson's retainer.

  28. Before considering the principles of equitable intervention, it is necessary to draw attention to three features of the retainers between Edmondson and the claimants which are of significance to the overall analysis.
  29. Each of the claimants entered into a CFA with Edmondson on the same standard form produced by Edmondson. This stated that it must be read in conjunction with the Law Society document "What you need to know about a CFA". I agree with the judge that this had the effect of incorporating the Law Society document. The Law Society document provided:
  30. "If you win your claim, you will pay our basic charges, our disbursements and a success fee. The amount of these is not based on or limited by the damages. You can claim from our opponent part or all of our basic charges, our disbursements, a success fee and insurance premium."

    However, in each case the retainer also incorporated a client care letter which included the following paragraph

    "For the avoidance of any doubt if you win your case I will be able to recover our disbursements, basic costs and the success fee from your opponent. You are responsible for our fees and expenses only to the extent that these are recovered from the losing side. This means that if you win, you pay nothing."
  31. I agree with the judge that there is a tension between these two provisions. The former contemplates that the claimants, when successful, would pay to their solicitors the charges and other sums referred to and would then recover them from their opponent. The latter contemplates that upon success the solicitor will recover such sums from the opponent. The solicitor has no recourse against his client for the fees and is limited to what he can recover from the losing side. I also agree with the judge that the provision in the client care letter must prevail because it is expressed to be for the avoidance of any doubt.
  32. Secondly, each CFA was subject to the Cancellation of Contracts made in a Consumer's Home or Place of Work etc. Regulations 2008 (2008 No. 1816). As a result, each of the claimants had the right to cancel his contract with Edmondson within the cancellation period of 7 days starting with the date of receipt by the consumer of a notice of the right to cancel. In each case the standard form CFA used by Edmondson included such notice. It also contained the statement that should the client wish Edmondson to undertake work immediately he should sign a disclaimer which states that it has been explained to the client that the agreement is cancellable within 7 days but that he wishes Edmondson to undertake work on the file with immediate effect and accordingly he waives his right to the cooling off period. All of the six claimants with whom we are concerned signed this waiver.
  33. Regulation 9 of the Cancellation of Contracts Regulations provides in relevant part:
  34. "Cancellation of specified contracts commenced before expiry of the right to cancel
    9(1) Where the consumer enters into a specified contract and he wishes the performance of the contract to begin before the end of the cancellation period, he must request this in writing.
    (2) Where the consumer cancels a specified contract in accordance with Regulation 8 he shall be under a duty to pay in accordance with the reasonable requirements of the cancelled contract for goods or services that were supplied before the cancellation…."

    Regulation 15 provides:

    "No contracting-out of contracts to which these Regulations apply
    15(1) A term contained in a contract is void if, and, and to the extent that, it is inconsistent with a provision for the protection of the consumer contained in these Regulations…."
  35. There is, to my mind, a tension between the purported waiver of the cooling off period and the provisions of the Regulations.  This matter was not argued before us.  However, for present purposes I am willing to proceed on the assumption that the waiver of the cancellation period was ineffective and that it would have been open to each of the claimants to cancel the retainer within 7 days.
  36. The third matter to which I wish to draw attention in connection with the retainer is that the Law Society document incorporated into the retainer makes provision for the eventuality that the client wins his proceedings but his opponent fails to pay. It states
  37. "If your opponent does not pay any damages or charges owed to you, we have the right to take recovery action in your name to enforce a judgment, order or agreement. The charges of this action become part of the basic charges."

    Khans Solicitors (a firm) v Chifuntwe

  38. The principle of equitable intervention has recently been considered by this court in Khans Solicitors (a firm) v Chifuntwe. There C instructed solicitors to bring proceedings for judicial review. The proceedings were compromised and the defendant agreed to pay C's costs. A bill was submitted but before it was paid C withdrew his instructions from his solicitors and accepted the defendant's offer of £6,000 in settlement of his costs, requiring that the money be paid directly to him. His solicitors had written to the defendant stating that they believed that C was attempting to avoid payment of costs properly due to them and putting the defendant on notice of their claim. The money was nevertheless paid directly to C who then disappeared. The solicitors issued proceedings under CPR Part 8, claiming a declaration that the compromise was not valid and either a charge or a lien upon the unpaid and as yet unassessed costs. This court held that the compromise was valid but that since the defendant had been on notice as to the costs due to the solicitors when it paid C, that payment was not a good discharge of the solicitors' claim and must be paid again.
  39. In his judgment Sir Stephen Sedley, with whom Rix and Ryder L.JJ agreed, referred to the readiness of the court and the breadth of its powers to safeguard a solicitor's entitlement to recover his costs (at [12], referring to Scarman J in In re the Estate of Fuld, decd (No. 4) [1968] P. 727). He explained that it has always been accepted that an attorney has a lien for his own fees on money which comes into his hands on a client's account. However difficulties begin to arise when the money has been paid to the client, so that no possessory or effectual lien has yet come into existence (at [13]). He then examined the relevant authorities from Welsh v Hole [1779] 1 Doug KB 238 onwards. In that case Lord Mansfield had been prepared to say that notice was a sufficient alternative to collusion.
  40. "I am inclined to go still farther, and to hold that, if the attorney give notice to the defendant not to pay until his bill should be discharged, a payment by the defendant after such notice would be in his own wrong, and like paying a debt which has been assigned, after notice." (at p. 239)

    Sir Stephen considered that more than one of the decided cases had come close to making law of this obiter dictum and that no authority inhibited the court from holding that a paying party, who is on notice that the receiving party's solicitor has a claim for fees upon part or all of the sum due, pays the receiving party directly at his own risk and that collusion is not necessary (at [16], [28]). He concluded

    "In our judgment, the law is today (and, in our view, has been for fully two centuries) that the court will intervene to protect a solicitor's claim on funds recovered or due to be recovered by a client or former client if (a) the paying party is colluding with the client to cheat the solicitor of his fees, or (b) the paying party is on notice that the other party's solicitor has a claim on the funds for outstanding fees. The form of protection ought to be preventive but may in a proper case take the form of dual payment." (at [33])


  41. In the present case, as the judge held, it was the intention of Haven to achieve a settlement of the claims by direct settlement with the claimants and thereby to avoid paying the solicitors' cost. So much is readily apparent from the transcripts of the telephone conversations with Mr. Tonkin and Mr. Grannell, referred to above.
  42. Edmondson's primary case on notice is that the provisions of the Protocol and the Portal are, in themselves in the modern climate of litigation, ample and sufficient notice of a lien. Here Ms. Anderson QC on behalf of Edmondson draws attention to the fact that the Protocol describes the behaviour the court would normally expect of the parties prior to the start of proceedings in cases falling within the Protocol (paragraph 2.1). She also points to paragraph 3.1 of the Protocol which states that the aims of the Protocol include ensuring that the defendant pays damages and costs using the process set out in the Protocol and that the claimant's representative receives the fixed costs at the end of each stage of the Protocol. Furthermore, paragraph 7.37 provides that any offer to settle made at any stage will automatically include and cannot exclude the Stage 2 fixed costs, an agreement in principle to pay disbursements and a success fee. Similarly, paragraph 7.40 provides that, subject to certain irrelevant exceptions, the defendant must on settlement pay the agreed damages (less certain specified deductions), any unpaid Stage 1 fixed costs, the Stage 2 fixed costs, the relevant disbursements allowed and the success fee, within a specified period.
  43. In this regards, Ms. Anderson also relies on the decision of Simon J. (sitting with assessors) in Butt v Nizami [2006] EWHC 159 as establishing that the fixed fee regime under CPR Part 45 operates whether or not the costs have actually been incurred and that the indemnity principle does not apply. There Simon J stated:
  44. "It seems to me clear that the intention underlying CPR 45.7-14 was to provide an agreed scheme of recovery which was certain and easily calculated. This was done by providing fixed levels of remuneration which might over-reward in some cases and under-reward in others, but which were regarded as fair when taken as a whole" (at [23])

    I also note that in that case Simon J rejected a submission that there is an overriding need to enable the paying party to satisfy itself that the conditional fee agreement is compliant with the regulations.

  45. On behalf of Haven, Lord Marks QC objects that the principle in Khans can operate only in the case of express notice of the lien. Although he refers in this regard to passages in Welsh v Hole, Read v Dupper (1795) 6 Durn & E. 361, The Hope (1883) 8 TD 144 and Ross v Buxton (1889) 42 Ch D190, I do not read any of these authorities as limiting the principle to express notice. On the contrary, Lord Mansfield's obiter dictum in Welsh v Hole clearly contemplates that implied notice will suffice.
  46. "Besides this application goes to the extent of controverting the validity of a payment of the whole debt and costs to a plaintiff without the privity of his attorney, and it would be too much to say, that a defendant shall not transact the business of a cause with the plaintiff himself, in a case where there has been no notice not to do so from the attorney, either express or implied – nothing even like saying, "I have no security for my bill", or, "I shall never be paid unless the plaintiff recover in this action". (at p. 239)

    Stirling J's observation in Ross v Buxton that

    "Where a valid compromise has been entered into under which a sum of money, the fruit of the action, is coming to the plaintiff, the defendant or his solicitor is not at liberty, after express notice by the plaintiff's solicitor of his claimed to lien, to pay that sum over to the plaintiff is disregard of the notice." (at p. 202)

    was in a case where express notice had been given and the question of implied notice did not arise. Similarly the observation of Sir Stephen Sedley in Khans that

    "…in practice, provided the solicitor moves rapidly, notice of his interest might be sufficient to block both the comprise of the debt and payment…" (at [27])

    was made in a case where express notice had been given and implied notice was not under consideration.

  47. I can see no reason in principle why implied notice should not be sufficient for the operation of the principle stated in Khans. Lord Marks submits that there is a logical reason for express notice being required. Express notice acts as in parallel with collusion. Both involve a similar degree of moral culpability on the part of the paying party so as to justify the court in ordering a double payment. A party must either collude in defeating the lien or must know that payment is being made against the background of a dispute and that the payment will have the effect that the lien may be defeated. However, to my mind, equitable intervention will be just as appropriate where implied notice of such matters is given. In any event, I am satisfied that the present case is one of express notice. Haven's knowledge of and participation in the scheme established by the Protocol and the Portal meant that it was well aware of the interest of Edmondson in receiving its fixed costs and other sums due under the Protocol scheme. Furthermore, it has not been disputed that Haven's objective in entering into the compromise agreements was to defeat that interest.
  48. Lord Marks submits, next, that the principle in Khans applies only to protect a solicitor's lien. In normal circumstances a solicitor would have a lien in respect of his fees and disbursements over any sums paid to the solicitor for the account of his client which represent the fruits of the solicitor's representation of the client. Such a lien depends on the existence of a liability of the client to his solicitor. Lord Marks submits that no such lien arose in the underlying cases with which we are concerned because of the overriding effect of the client care letter referred to above. In this regard he points to the definition of lien in the Law Society document incorporated into each of the CFAs as follows:
  49. "Our right to keep all papers, documents, money or other property held on your behalf until all money due to us is paid. A lien may be applied after this agreement ends."

    For the reasons set out above I consider that the effect of the client care letter is to override the general provisions in each CFA with the result that the claimants were not under any personal liability to pay the fees of Edmondson. Rather, Edmondson has limited its fees to what may be recovered from the defendants in the underlying proceedings. In these circumstances, Edmondson would not have a lien over assets received on its clients' account because there is no underlying liability of the clients to Edmondson for the lien to protect.

  50. This is not the end of the matter, however. While Edmondson has no right to recover fees from its clients, I consider that in the normal course of events Edmondson would have an entitlement to recover the fixed costs and other sums payable under the Protocol scheme. This is either an entitlement in Edmondson itself or, alternatively, in the light of the contractual arrangement between Edmondson and its clients referred to at paragraph [22] above, an entitlement to bring proceedings in the name of the clients to recover these sums. In either case, Edmondson has an interest which equity can protect and which is deserving of protection. It is an interest of which Haven was aware by virtue of its knowledge of and participation in the Protocol scheme. I accept that this may involve an extension of the principle enunciated in Khans, but I can see no reason why it should not apply in the particular circumstance of this case.
  51. In Khans this court made clear that a client undoubtedly has the ability to dismiss his lawyers and to continue in person and that, accordingly, in that case C was free in principle both to compromise his claim for costs and to take payment of the agreed sum himself (at [27]). In the present case Lord Marks submits that the Protocol scheme is not mandatory and that it was therefore open to Haven to enter into compromise agreements with the claimants which were, as he put it, outside the Protocol. I agree. However, that was not what occurred in these cases. In each case the claimant had authorised Edmondson to commence the Protocol process on his behalf and Edmondson had done so by posting the CNF on the Portal. Haven, as the insurer of the defendants in the underlying proceedings, had voluntarily entered into the Protocol process by posting an acknowledgement on the Portal within the time allowed. It would, thereafter, have been open to the claimants or Haven to exit the Protocol process. Furthermore, certain failures by the participants would have had the effect of the claim automatically exiting the Protocol process. However, neither the claimants nor Haven formally exited the process before entering into the compromise agreements. Moreover, there was no default on the part of any of the participants which resulted in any of the claims being automatically removed from the Protocol process before it was compromised. In none of the cases had the period set for the insurer's response expired at the date of settlement. Contrary to Lord Marks's submission, the fact that the terms of the compromise agreements were inconsistent with the Protocol scheme, which they undoubtedly were, did not have the effect of removing the claims from that scheme. In each case Haven acted with the intention of defeating Edmondson's entitlement under the scheme, of which Haven had notice at a time when the claim remained within the scheme.
  52. Finally, it is submitted on behalf of Haven that it did not even have implied notice of a claim to costs. It is submitted that Haven was ignorant of the detailed terms of the CFAs except that it understood from Mr. Tonkin that they provided for a 14 day cancellation period. Lord Marks submits that given that all the offers of settlement were made within this 14 day period, Haven had no way of knowing that the CFAs could not be cancelled without liability arising to make payment of Edmondson's fees. It is submitted that on that ground alone, Haven had no notice of the claimed costs.
  53. I have considered earlier in this judgment the Cancellation of Contracts made in a Consumer's Home or Place of Work etc. Regulations 2008 and their interaction with the provisions of the CFA.  The cancellation period was one of 7 days starting with the date of receipt by the client of a notice of the right to cancel, i.e. in these cases the date of signature of the CFA.  As explained above, I proceed on the assumption that each retainer was cancellable by the claimant within 7 days.  I accept that if a retainer had been validly cancelled in accordance with the Regulations, Edmondson would have no entitlement to claim from third parties fees for work done during that period.
  54. In the case of the underlying claimants, with the exception of Mr. Grannell, Haven made the offer to compromise within the 7 days cancellation period. In the case of Mr. Grannell the offer was made within 14 days of conclusion of the CFA. None of the offers was accepted within the 7 day cancellation period.
  55. To my mind Lord Marks's reliance on a 14 day cancellation period is a red herring. There was no power to cancel in 14 days. Mr. Tonkin was mistaken. Furthermore there was no evidence that his representation was communicated within Haven or that Haven's employees knew of it other than in the case of Mr. Tonkin. Furthermore there is no evidence that anyone within Haven relied on the existence of a 14 day cancellation period in making an offer of settlement.
  56. More fundamentally, I consider that the fact that an offer may have been made at a time when a retainer was still cancellable or otherwise terminable cannot relieve Haven of liability. In each case, Haven, with knowledge of the existence of a CFA and that the claim was proceeding within the Protocol scheme, made an offer of settlement with no express limitation as to the period within which it could be accepted. It would have been open to Haven to make the offer conditional on cancellation of Edmondson's retainer within the permitted period but it did not do so. In each case Haven assumed the risk that its offer might be accepted after the expiry of the cancellation period. In the event, in none of the underlying cases was the retainer cancelled or otherwise terminated.
  57. Conclusion.

  58. For these reasons I consider that Haven entered into each compromise agreement with notice of Edmondson's entitlement and that the principle of equitable intervention requires that Haven pay to Edmondson in each case the sums payable on settlement under the Protocol scheme, as set out in paragraphs 7.37 and 7.40 of the Protocol.
  59. I would allow the appeal on this ground. I consider, therefore, that it is not necessary to hear argument at a resumed hearing on the other grounds of appeal.

  61. I agree.

  63. I also agree.

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