The High Court decision in Seladore Legal Limited v PGMBM Law Limited has brought renewed attention to the drafting of conditional fee agreements and the risks that arise where fee structures are not clearly articulated.

While the dispute itself concerns a £3.1 million claim between two law firms, the issues considered go well beyond the facts of the case. In particular, the judgment provides useful guidance on how the courts will approach CFA interpretation, percentage uplifts, and the enforceability of fee arrangements under section 58 of the Legal Services Act 1990.

For firms involved in litigation support or operating under conditional fee agreements, the case is a reminder that imprecision in drafting can have significant financial consequences.

 

Background to Seladore Legal v Pogust Goodhead

The dispute arose between Seladore Legal and Pogust Goodhead in the context of large-scale group litigation. Seladore Legal had provided litigation support services and later sought recovery of its fees, which were said to total approximately £3.1 million.

The matter came before the High Court in April 2025, where the central question was not simply whether work had been carried out, but how that work was to be valued under the relevant agreement.

In particular, the court was required to consider whether the agreed fee structure – including any percentage uplift – had been properly defined, and whether the arrangement complied with the statutory framework governing conditional fee agreements.

 

The Court’s Approach to CFA Interpretation

A key feature of Seladore Legal v Pogust Goodhead is the court’s emphasis on substance over form. The judgment makes clear that the court will not allow defective drafting to be dismissed as otherwise “empty formalism” where the effect is to create uncertainty as to payment.

The starting point remains section 58 of the Legal Services Act 1990, which governs the enforceability of conditional fee agreements. For a CFA to be valid, it must clearly state the circumstances in which fees are payable and, critically, set out how any success fee or percentage uplift is to be calculated.

In practical terms, the court’s approach can be summarised as follows:

• The agreement must clearly identify when fees become payable
• Any success fee must be expressly defined, not implied
• The mechanism for calculating fees must be capable of objective application
• The court will prioritise substance over drafting labels.

In this case, the court scrutinised whether the agreement properly identified the basis on which fees were to be charged, including whether standard rates applied and how any uplift interacted with those rates.

 

Percentage Uplifts and the Need to “State the Percentage”

One of the more significant aspects of the decision is the court’s treatment of success fees.

The requirement to “state the percentage” is not a technicality. It goes to the heart of enforceability. A failure to clearly define the percentage uplift, or to explain how it is to be applied, may render the arrangement non-compliant.

In Seladore Legal v Pogust Goodhead, the court examined whether the rates claimed, said in some instances to represent 170% of standard fee rates, had been properly agreed and documented. The absence of clarity in this regard was central to the dispute.

For practitioners, the point is straightforward: if a CFA includes a percentage uplift, it must be expressly stated and capable of being applied without ambiguity. Anything less risks challenge at the point of assessment.

 

Functionality Identical Arrangements and Compliance Risks

Another issue arising from the case is the treatment of arrangements that are not labelled as conditional fee agreements but are, in substance, functionally identical.

The court’s analysis suggests that it is the substance of the agreement that matters. Where an arrangement operates in the same way as a CFA – for example, where payment is contingent on outcome and includes a success-related uplift – it may fall within the statutory regime regardless of how it is described.

For law firms, this creates a number of practical risks:

• Recharacterisation of agreements as CFAs after the event
• Non-compliance with section 58 leading to unenforceability
• Increased exposure to costs challenges and reductions
• Difficulty recovering fees through final statute bills

Attempting to avoid the requirements of section 58 through drafting alone is unlikely to succeed if the agreement is, in reality, a conditional fee arrangement.

 

Costs Recovery and Final Statute Bills

The case also highlights the importance of properly prepared final statute bills when seeking to recover fees.

Where there is uncertainty as to the basis or charging, or where the agreement itself is open to challenge, recovery may be significantly reduced or resisted altogether. The role of detailed billing, supported by a clear contractual framework, remains central.

For firms engaged in high-value litigation, particularly group actions, this is not simply a technical issue. It is a matter of commercial risk.

 

What Seladore Legal v Pogust Goodhead Means in Practice

The decision reinforces a number of established principles, but does so in a way that is directly relevant to modern litigation practice.

Conditional fee agreements must be drafted with precision. Percentage uplifts must be clearly stated. Fee structure must be transparent and capable of being applied without dispute. Where they are not, the consequences can be substantial.

More broadly, the case served as a reminder that the courts will look beyond labels and examine the true nature of the arrangement. Agreements that are functionally identical to CFAs will be treated as such, with all the regulatory implications that follow.

 

How Greener Costs Can Help

At Greener Costs, our costs lawyers and draftsmen advise on solicitor-client costs disputes, including disputes arising from conditional fee agreements and complex litigation funding arrangements.

Whether you are reviewing CFA terms, preparing final statute bills, or facing a challenge to your fee structure, we provide clear, practical advice grounded in current case law.

We offer transparent, upfront pricing on all instructions with no hidden fees.

Get in touch today to discuss your requirements.

📞 01204 263047
✉️ info@greenercosts.co.uk

 

Frequently Asked Questions

What is Seladore Legal v Pogust Goodhead about?
It is a High Court dispute concerning a £3.1 million claim for fees arising from litigation support work and the interpretation of fee arrangements between law firms.

Why is the case important for conditional fee agreements?
It highlights the need to clearly define fee structures, particularly percentage uplifts, to ensure compliance with section 58 of the Legal Services Act 1990.

What does “state the percentage” mean in a CFA?
It requires the agreement to clearly set out the success fee uplift as a specific percentage, so it can be applied without ambiguity.

Can an agreement be treated as a CFA even if it is not labelled as one?
Yes. If the arrangement is functionally identical to a conditional fee agreement, the court may treat it as such.

What are the risks of unclear CFA drafting?
Unclear drafting can lead to disputes, challenges to enforceability, and difficulties recovering fees through final statute bills.