Could a case on CFAs have major implications for litigation funding? (Diag Human SE and another v Volterra Fietta)

Article summary

Dispute Resolution analysis: On 4 October 2023, the Court of Appeal handed down judgment in Diag Human SE and another v Volterra Fietta, upholding the decisions of the two lower courts that solicitors who had entered into an unenforceable discounted conditional fee agreement (CFA) could not obtain any payment under it through severance of the conditional terms or quantum meruit. In this article, Jamie Carpenter KC of Hailsham Chambers, who represented Diag Human SE, considers the Court of Appeal’s judgment. The two previous decisions, in the Senior Courts Costs Office and the High Court, attracted relatively little attention, appearing simply to confirm what had been generally understood since the ‘CFA wars’ of the noughties. However, the Supreme Court’s decision in R (PACCAR) v Competition Appeal Tribunal (handed down between argument and judgment in Diag) suddenly gives the case enormous significance for arguments over litigation funders’ rights under litigation funding agreements (LFAs) rendered unenforceable by PACCAR.