New Precedent: Establishing the Retrospectivity of Conditional Fee Agreements in Insolvency Litigation

Introduction

The case of Singh & Ors v Ingram ([2025] EWCA Civ 264) presents a critical judicial decision that establishes a new legal precedent regarding the interpretation of Conditional Fee Agreements (CFAs), specifically their retrospective application in insolvency cases. The background of the case centers on the dispute over whether a CFA entered into on 24 March 2015 between the respondent (acting in his capacity as liquidator) and Boyes Turner LLP should extend its effect to cover legal work performed prior to its execution. The parties involve the respondent, who initiated proceedings in relation to alleged fraudulent actions by the appellants (former directors of MSD Cash and Carry PLC), and the appellants themselves, who are challenging both the retrospective nature of the CFA and its far-reaching cost implications.

The importance of this judgment lies in clarifying that, under the proper construction of the CFA and the factual matrix available to the parties at the time, the agreement was intended to have retrospective effect. This decision addresses the contentious issue of whether legal work conducted since 30 March 2012 falls within the ambit of the CFA, setting a new benchmark for the interpretation of such contractual provisions.

Summary of the Judgment

The central finding of the court is that the CFA entered on 24 March 2015 between the respondent and Boyes Turner LLP was expressly retrospective. The court held that the agreement covered all legal work done on the Claim from 30 March 2012 (the effective start date of the legal engagement) to the present, as no temporal distinction was made between past and future work. The judgment reiterates that the plain language of the CFA, combined with the parties’ prior working practices and the surrounding factual context, unambiguously indicated that the retrospective application was intended.

In addressing the grounds of appeal, the court rejected several arguments put forward by the appellants. These included challenges to the clarity of the CFA’s wording, the alleged necessity of an express retrospective term, and contentions that the definition of “the Claim” could be regarded as merely descriptive. The decision further emphasized that the ordinary principles of contractual interpretation apply in the absence of statutory or procedural deviations specific to CFAs.

Analysis

Precedents Cited

The judgment draws significantly on established case law and statutory provisions. Key references include:

Woods v Capita [2017] AC 1173 – The judgment relies on the well-established principle that contractual language should be interpreted according to its context and the objective understanding available to a reasonable person at the time of the contract.
Lukoil Asia Pacific (PTE) Limited v Ocean Tankers (PTE) Limited ("Ocean Neptune") [2018] EWHC 163 (Comm) – The decision quotes Popplewell J’s user-friendly summary regarding the objective meaning of language within contracts, stressing that common business sense should prevail.
Birmingham City Council v Forde [2009] EWHC 12 – This case confirms that CFAs can be retrospective, and its reasoning resonates in the current judgment.
Motto v Trafigura [2011] 1 WLR 657 – The judgment revisits obiter remarks concerning the presumption of prospective agreements in solicitor-client relationships, noting that parties retain the freedom to agree otherwise.
Various statutory provisions including Section 59 of the Solicitors Act 1974 and Section 58(3) of the Courts and Legal Services Act 1990 – These provisions underscore that while CFAs must be in writing, they are not limited to prospective application only.

The reliance on such precedents and statutory context bolsters the interpretation that the CFA’s language, when read in full with its accompanying definitions and factual matrix, clearly supports a retrospective application.

Legal Reasoning

The court’s reasoning is anchored in the principle of contractual interpretation that emphasizes the objective meaning of the words used. Key aspects of the reasoning include:

Contextual Reading: The CFA was read in its entirety, with no division between work done before or after its execution. The language and definitions within the document demonstrate a uniform approach to covering all work related to the Claim.
Factual Matrix: The prior working relationship between the respondent and Boyes Turner LLP is instrumental. Evidence showed that the parties were accustomed to agreements that retrospectively covered legal work, an understanding that clearly influenced how the CFA was drafted.
No Need for Explicit Terminology: The court dismissed the appellants’ insistence that the explicit use of a word like “retrospective” was necessary. It held that the overall contractual language sufficed to convey the intended meaning, thereby negating the presumption that solicitor agreements must only apply prospectively.
Interplay of Definitions: Particularly, the definition of "the Claim" which included reference to work performed since 30 March 2012, reinforced that the retrospective nature was not in doubt.

This careful analysis affirms that the CFA was intended to cover all costs incurred in relation to the Claim, regardless of whether such work was done before or after the agreement was signed.

Impact

The decision in this case has significant implications for future litigation and the drafting of CFAs:

Clarification of Retrospective Scope: Solicitors and their clients now have clear judicial backing for entering into retrospective fee agreements, provided that the language of the contract and the factual context support such an intention.
Practice in Insolvency Cases: Given that insolvency cases often involve work undertaken over extended periods and under uncertain commercial conditions, this judgment provides a template for addressing cost recovery and risk allocation in litigation.
Guidance on Contract Drafting: The case underscores the importance of precise and clear drafting. Future CFAs might benefit from explicit language concerning the historical period of covered work, although the decision also illustrates that common understanding—when paired with proper contextual evidence—can suffice.
Regulatory and Professional Duties: While the judgment acknowledges potential regulatory breaches regarding the communication of CFA terms, it distinguishes such breaches from the contractual interpretation itself. This may caution solicitors to adhere strictly to professional duties without undermining the enforceability of the agreement.

Complex Concepts Simplified

Several legal concepts emerge in the judgment which may be complex for non-specialists:

Retrospective Effect: This refers to an agreement that applies to work or actions performed before the formal signing of the contract. Here, it means that the CFA covers legal work done starting from a date prior to the signing—in this case, from 30 March 2012.
Factual Matrix: This is the totality of circumstances and background knowledge that both parties possessed at the time of entering into the agreement. It plays a crucial role in how the language of a contract is interpreted.
Contractual Interpretation: Courts determine the meaning of contractual language by considering the ordinary usage of words, the context provided by the entire document, and any relevant factual circumstances that illuminate the parties’ intentions.
Conditional Fee Agreement (CFA): A CFA is an arrangement where a solicitor’s fee is partly contingent on the success of the litigation. This case clarifies that such agreements can cover previously performed work if the contractual wording allows for it.

Conclusion

In summary, the judgment in Singh & Ors v Ingram marks a landmark decision in the interpretation of Conditional Fee Agreements by unequivocally affirming that a CFA can be retrospective. The court’s meticulous analysis—linking plain language, established precedents, and the relevant factual matrix—demonstrates that the agreement clearly intended to cover all legal work from 30 March 2012 onward. This decision not only reinforces traditional principles of contractual interpretation but also provides practical guidance for future agreements involving insolvency litigation.

The significance of this judgment is far-reaching. Solicitors and clients alike now have a clearer understanding of how retrospective arrangements can be validly constructed and enforced. Moreover, the ruling reinforces that while regulatory duties towards the client are essential, they do not automatically alter the enforceability of a clearly worded contractual agreement.

As such, this decision stands as a critical precedent in the evolving landscape of legal cost recoveries and contractual risk allocation in litigation, ensuring that both future legal disputes and the drafting of CFAs reflect the objective and historically-informed intentions of the parties.