Recently, we have seen a marked escalation in Defendants raising issues to do with The Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008 and related regulations such as The Consumer Protection (Distance Selling) Regulations 2000.

This follows the Court of Appeal’s decision in Cox v Woodlands Manor Care Home Ltd in which a CFA, to which the 2008 Regulations applied, was found to be unenforceable due to a failure by the Claimant’s Solicitors to provide notice of a right to cancel. Consequently costs were assessed at nil in accordance with the indemnity principle.

This seems to be a staple point in Points of Dispute now regardless as to the circumstances of the retainer being made. For example, we are seeing the point raised on bills that do not record any personal attendance. That said, a personal attendance at the outset does not automatically mean the contract was “made” at the Claimant’s home or workplace. In circumstances where initial instructions are taken at the Claimant’s home or workplace including the provision of oral advice as to how a CFA works, but the CFA is subsequently sent out and signed by way of correspondence, the 2008 Regulations are not likely to apply.

In those circumstances the Consumer Protection (Distance Selling) Regulations 2000 are not going to apply either as the application of those regulations relies on the retainer being made “exclusively” by means of distance communication i.e. distance communication must have been the only means by which the solicitor communication with the Client.

We have seen Defendants trying to lump the 2000 Regulations in with the 2008 Regulations. However where a Solicitor has failed to provide the relevant cancellation notice under the 2000 Regulations, by Regulation 12(4) it simply means the cancellation period is automatically extended by 3 months. It does not render a CFA unenforceable.

Something in the 2000 Regulations that Claimant Solicitors ought to be wary of is Regulations 19 which states the Solicitor must perform the retainer i.e. conclude the claim within 30 days of the retainer being made. That is obviously highly unlikely where the retainer is for legal services. However under 19(5) unless it is agreed that the work will take longer than 30 days, the retainer will be treated as if it had not been made (void ab initio). Obviously that could very well lead to problems proving adherence with the indemnity principle and the potential disallowance of all costs under the retainer. There is no authority to suggest the court will apply the Regulations in such a harsh way but nevertheless it’s probably not a risk worth taking.

Of course, both the 2000 and 2008 Regulations have since been replaced by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 which came into force on 13 June 2014. Those regulations introduce an extended list of pre-contract information for distance and off-premises contracts, including a model cancellation form to be provided where there is a right to cancel, an extended ‘cooling-off’ period of 14 days, and an automatic extension of the cancellation period to 12 months where the appropriate pre-contract information is not provided.