Assignment and Novation Points

Question 1

In what 4 circumstances would the transfer of a CFA be required

Answer 1

1. Firm A goes into Administration
2. Firm A is bought or merges
3. Firm A changes its name or practice
4. Sol. moves to a new firm and client follows

Question 2

Circumstances when Assignment or Novation required

Answer 2

Question 3

What is Assignment?

Answer 3

Transfer of an EXISTING agreement
Transfer existing rights under the agreement
from one party to another
DOESN’T Create new rights

Question 4

What is Novation?

Answer 4

Creates a NEW agreement
ORIGINAL agreement comes to an END
and
A NEW agreement starts

Question 5

Why was the distinction between Assignment and Novation thought to be important in relation to the impact on costs?

Answer 5

Because Pre LASPO 1st April 2013 CFAs could recover a success fee/ additional liabilities,

And so it Assignment was thought to be required to allow the Pre LASPO benefits to transfer

However, it doesn’t matter whether it’s assignment or novation - It was never the intention of parliament to prevent the first solicitor from being paid or prevent the recoverability of additional liabilities.

Termination of the CFA means first solicitor not entitled to recover costs or success fee

Question 6

Assignment

Answer 6

Question 7

Novation

Answer 7