The High Court of England and Wales recently considered the enforceability of certain provisions of a Conditional Fee Agreement (CFA) in Higgins & Co Lawyers Ltd v Evans.
This was an appeal against a finding of a Master of the High Court that a provision of a CFA was unenforceable. That provision was that the estate of a deceased litigant party to the CFA was said to be liable for basic charges in respect of legal work undertaken by solicitors prior to his death. Master McCloud held that clause to be unenforceable in accordance with the Interfoto principle (Interfoto Picture Library Limited v Stiletto Visual Programmes Limited). According to that principle, the relevant test is as follows:
- Was the provision onerous or unusual?
- If the provision was onerous or unusual, had it been fairly and reasonably brought to the other party’s attention?
The High Court summarised the substance of the Interfoto principle in modern case law which was reviewed relatively recently by the English Court of Appeal in Goodlife Foods Ltd v Hall Fire Protection Ltd (previously blogged here). The basic principle is that it is well-established at common law that if a party knows that there are standard conditions provided as part of an offer, a condition which is particularly onerous will not be incorporated unless it has been fairly and reasonably brought to the other party’s attention – the more outlandish the provision, the greater the onus that it be brought to the other party’s attention. The High Court observed that the principle in Interfoto is not concerned with a general doctrine of unfairness in contract law and cited the well-known authority of L’Estrange v Graucod as authority for the proposition that a person who signs a document knowing that it is intended to have legal effect is generally bound by its terms, whether he or she has actually read them or not.
The Court overturned the decision of the Master, holding that the particular provision was enforceable. The decision provides helpful clarification that the Interfoto principle does not apply where the document has been read, understood and signed.