High Court rules disputed conditional fee agreements were lawfully enforceable
The High Court has ruled that conditional fee agreements (CFAs) between law firms Seladore Legal Limited and PGMBM Law Limited were enforceable, rejecting arguments that alleged drafting defects rendered the retainers invalid. In a judgment handed down on 1 June 2026, Master Pester granted summary judgment in favour of Seladore on the issue of enforceability in proceedings concerning unpaid legal fees exceeding £2.2 million.
The dispute arose from two retainers signed in May 2023 under which Seladore agreed to provide litigation support and equitable lien-related legal services to PGMBM, which trades as Pogust Goodhead. The arrangements involved discounted CFAs, allowing PGMBM to pay reduced hourly rates initially, with enhanced rates becoming payable if defined “Success” conditions were met.
Seladore issued 20 interim invoices between May 2023 and October 2024, totalling £978,411.03 including VAT. PGMBM paid most of those invoices, but Seladore later issued final statute bills totalling more than £3 million, leaving an alleged outstanding balance of approximately £2.21 million.
PGMBM argued the retainers breached section 58(4)(b) of the Courts and Legal Services Act 1990 because they allegedly failed to state correctly the percentage increase applied to fees in the event of success. The firm also counterclaimed for the return of sums already paid.
The challenged wording stated that uplifted fee rates “represent 170% of the standard fee rates set out above (subject to rounding)”. PGMBM argued that because hourly rates were rounded, the agreements did not identify a single precise percentage increase as required by statute. Master Pester rejected that argument.
The court held that stating uplifted rates represented “170%” of standard rates was functionally equivalent to saying fees would increase by 70%. The judgment described any contrary interpretation as “empty formalism”. The court also found that minor rounding differences did not render the agreements unenforceable. According to the judgment, the effective uplift percentages varied only marginally between fee earners, ranging from 70.06% to 70.21%.
Master Pester concluded there had been “literal compliance” with the statutory requirements governing CFAs. The judgment further held that even if there had technically been a breach, it would not have been material under the principles established in Hollins v Russell because there was no materially adverse effect on client protection or the administration of justice.
The ruling leaves unresolved a separate dispute concerning whether the contractual definition of “Success” had been satisfied and whether all fees charged by Seladore were reasonable. However, the court confirmed that PGMBM’s unenforceability defence and related counterclaim could not proceed.