CFAs and the Cayman Islands

Many years ago, one of the more interesting cases that I dealt with concerned the recovery of success fees in costs litigation in the Cayman Islands.

Having been instructed, I suggested a conference would be required, but before I had even begun to pack, my client announced that he would fly to Birmingham and come and see me in chambers, destroying my hopes of costs litigation in the morning and tropical windsurfing in the afternoon.

Since then, I have kept an eye on developments in the Cayman Islands, and other Dependent Territories.

In the case of Quayum v Hexagon Trust Company (Cayman Islands) Limited [2002] CILR 161 the Chief Justice of the Cayman Islands, following the Thai Trading case announced the development of conditional fee agreements as a creature of common law and devised a system of court led supervision of such agreements. Jurisprudentially this led the Cayman Islands into uncharted territory, as within their domestic law, both maintenance and champerty remain as crimes and torts. The legislature had not intervened to permitt contingency fee arrangements. It did not help, that Thai Trading itself, was a flawed decision, made in ignorance of the statutory prohibition on contingency arrangements contained in the Solicitors Practice Rules 1990.

Retrenchment had to come, and in the case of Latoya Barrett v The Attorney General [2012] 1 CILR 127 the Cayman Islands Court of Appeal both declared that success fees were irrecoverable under conditional fee agreements, but also called for the law to be reexamined by the Cayman Islands Law Reform Commission.

At the end of last year, an interesting paper was published which can be found here: cayman-islands-law-reform-commission and which contains a fascinating comparative study of the law in the Cayman Islands, Canada, the USA and South Africa, as well as the UK and attempts to synthesise a solution for the Cayman Islands, described as a developing society, with its own Legal Aid system under financial pressure. It is worth reading both for those intending to litigate in the Cayman Islands and for those who general readers interested in seeing how a society both like and unlike are own, is grappling with familiar issues in its own way.

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