Permission to appeal a judge's decision approving a contingency fee arrangement between an applicant to the Financial Conduct Authority's redress scheme and his lawyers, has been refused. (Bolt Burdon v Tariq).

Mr Tariq had entered a no win no fee agreement with his lawyers, Bolt Burdon, (BB) under which they would receive 50% of any sums recovered by Mr Tariq through the Financial Conduct Authority Redress Scheme (FCA Scheme). At the time of the agreement Mr Tariq's chances of recovering significant compensation were accepted by the judge to be as low as 20%, partly because the FCA Scheme had already said that they would not award compensation, despite finding that the financial product that Mr Tariq had purchased had been sold in a "non-compliant way", and also because the limitation period for a court claim had expired. After negotiations conducted by BB, and the submission by them of an expert's report, Mr T accepted an offer in excess of £820,000 and BB billed him over £490,000, including VAT and disbursements.

Pure contingency fee agreements between client and lawyer (which are different from conditional fee agreements or damages based agreements) are permissible only for "non-contentious" business. Non contentious business comprises all work that is not defined as "contentious" in the Solicitors Act 1974, section 87: contentious business is "business done, whether as solicitor or advocate, in, or for the purposes of proceedings before a court or before an arbitrator". Contingency fees are therefore permissible for tribunal work, claims before ombudsmen (such as the Financial Ombudsman Service) or in respect of other out of court redress schemes. They may be challenged by a client, as happened in this case, as being "unfair or unreasonable" (Solicitors Act 1974, section 57). But the court here had rejected Mr Tariq's challenge to his solicitor's bill, confirming that the sums claimed were recoverable.

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