Cancellation notice: client care letter, TOB or CFA?

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Published on LexisPSL on 10/06/2014

The following Practice Compliance Q&A provides comprehensive and up to date legal information covering:

  • Cancellation notice: client care letter, TOB or CFA?
  • Standard retainer
  • CFA at the outset
  • Entering into a CFA at a later stage

Cancellation notice: client care letter, TOB or CFA?

From 13 June 2014, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 replace the Consumer Protection (Distance Selling) Regulations 2000 and Cancellation of Contracts made in a Consumer's Home or Place of Work etc Regulations 2008. The regulations apply if you enter into an off-premises or distance contract with a consumer client.

At the heart of the regulations is the duty to give the client:

  1. notice of their right to cancel (called Instructions for cancellation) and

  2. a prescribed cancellation form

These are separate documents, which can be found in Schedule 3 of the Regulations—see precedents: Instructions for cancellation (non-digital content) or Instructions for cancellation (digital content) and Cancellation form

This Q&A deals with the practical question: should you include the Instructions for cancellation in your client care letter or terms of business. It also suggests best practice where you are entering into a funding agreement, eg a conditional fee agreement (CFA) or damages-based agreement (DBA). Where this Q&A refers to CFAs, the same principles apply to DBAs.

Standard retainer

If you are not entering into a CFA, you will probably incorporate the Instructions for cancellation into your client care letter or Terms of Business and attach the Cancellation form as a separate document. Many firms will be tempted to use the Terms of Business for the Instructions for cancellation

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