SOLICITOR AND OWN COSTS ASSESSMENT: HIGH COURT UPHOLDS DECISION THAT CLIENT NOT LIABLE TO PAY ADDITIONAL COUNSEL’S FEES: SOLICITOR TERMINATED THE RETAINER AND COULD NOT RECOVER COSTS

I wrote about the first instance decision in Murray v Richard Slade And Co Ltd [2021] EWHC 3383 (QB), in two posts in January this year, the first is here, the second here.  The claimant in that case (the solicitor whose bills were at issue) appealed. However the appeal was not successful.

“… the Judge was entitled to find that the Respondent had neither terminated the Conditional Fee Agreement nor done what amounted to a repudiatory breach of that agreement. Nor do I agree with the Appellant that the correspondence showed an irretrievable breakdown in the necessary relationship of trust and confidence. In modern times, solicitors have to accept that complaints (whether of poor service or as to fees) go with the territory of professional practice.”

 

The claimant (“the client”) sought assessment of three invoices rendered by the defendant, his former solicitor (“the solicitor).  There were two primary issues (i) was the client liable to pay counsel’s fees when a more senior counsel had been instructed by the solicitor whose costs exceeded the budgeted figure; (ii) who terminated the retainer?   In the first instance hearing the Master found that the client was not liable to pay the additional counsel’s fees and that it was the solicitor who had determined the retainer, meaning that there was no ability to recover costs in that particular action.

 

PAYMENT OF COUNSEL’S FEES

One issue in the case related to whether the client was liable to pay counsel’s fees incurred by the solicitor.  The client’s case was that it had been agreed that the litigation would be conducted at a fixed cost of £50,000.  Counsel’s fees were outside that £50,000 and, it was the client’s case, that they were not liable to pay it.

At first instance Master Haworth held that the fees were not recoverable from the client.  Sir Andrew Nicol (sitting with an assessor Costs Judge Simon Brown) considered the solicitor’s appeal.

THE SOLICITOR’S UNSUCCESSFUL APPEAL

The solicitor’s appeal on this issue was not successful.
    1. I start with the premise of ground 3.
    1. I do not accept that the Judge implicitly accepted that the Respondent had authorised Mr Slade to instruct new and more senior counsel. As the Judge said at [36] of his decision the agreement for an all-in fee was important to the Respondent because, in part, of his previous complaint concerning the Appellant’s fees on Hodders. There was an exception, namely if the Respondent wanted a more senior barrister, then he would have to pay the additional cost (my emphasis). But, on the Judge’s resolution of what he saw as the preliminary issue in relation to the parental litigation, the Appellant had instructed Mr Moraes on his own initiative without his client’s instructions. In those circumstances, it seems to me unreal to say that it was implicit in the Judge’s decision that the Respondent had instructed the Appellant to instruct different and/or more senior counsel.
    1. I do not consider that I am impelled to a different conclusion because the Judge referred to the presumption and to the need for informed consent. It may well be that exploration of these matters was unnecessary if, as I conclude was the case, that the Judge had determined that the instruction of Mr Moraes by the Appellant was totally without the Respondent’s authority, but it is a common device for a Judge to reinforce a conclusion to which he has come by reference to other matters which point in the same direction.
    1. This was a careful decision by the Judge which dealt fully and sufficiently with all the issues he had to decide. In my view the suggested findings in ground 6(i) and (ii) were incompatible with his express findings and these were ones to which it was open to the Judge to come.
    1. Before turning to the other grounds of appeal I note that at more than point of the grounds Mr Williams used the phrase ‘without limitation’. I have doubts as to whether this is, with respect to him, a proper formulation of grounds of appeal. It gives the impression that other matters, not included in the grounds might be relied upon. But that would be to subvert CPR r.52.21(5) that only matters contained in the appeal notice can be relied upon unless the Court grants permission to amend the grounds. Mr Williams recognised this when he applied to amend his grounds to add what I have called ground 6 In any event, with the exception of ground 6 (for which I gave permission) Mr Williams did not seek to rely on any other matters. It is not, therefore, necessary to resolve this issue, which, as Mr Williams said when this judgment was circulated in draft, I had not raised at the hearing.
    1. I turn to ground 1. This overlooks the fact that the Judge’s decision that the fees for Mr Moraes’ services was ‘unusual’ did not rest the solely on the fact that the fees agreed with Mr Moraes’ clerk exceeded the budget for the trial phase. The Judge also found that the fee was unusual because it was an all-in fee for the trial as a whole. It was not divided (as is customary) between a fee for the brief and other fees for refreshers in the event that the trial went into a second or subsequent day. While that would mean that the client was protected if the trial lasted longer than the projected number of days, it also meant that the whole fee would be payable if the case settled early (which was in fact what happened). In my judgment, a finding that the fee was ‘unusual’ was well within the permissible range of decisions to which this experienced Judge could come.
    1. I turn to ground 2. I do not accept that rule 46.9 can only apply in the circumstances specified in this ground 2(a). Rule 46.9(1) begins,
“This rule applies to every assessment of a solicitor’s bill [with immaterial exceptions]”
    1. Thus, the rule is general and, I agree with Mr Dunne that the rule is not limited in the way that the Appellant suggests. As for the point made in ground 2(b), this Judge would have been well aware that budgeted costs concern the particular phase of the trial, and he would have seen that the budgeted costs in this case for the trial phase was £25,740. But that figure had been arrived at taking account of counsel 1’s fees. Again, it was open to the Judge to find that the payment of a further sum to different counsel was ‘unusual’.
    1. I turn to ground 3. I have already addressed the premise of ground 3, but I recognise that this ground also makes the point that the presumption was rebuttable. I agree with Mr Williams thus far and I reject Mr Dunne’s submission that the presumption was in truth irrebuttable. That would be to convert the rule into a statement of law and would be contrary to the language of 4.46.9(3). The Practice Direction says in terms that the presumption may be rebutted and I consider that to be an accurate statement of the position.
    1. However, while I go this far with Mr Williams, since, for the reasons I have given, I do not accept that the Judge considered that the Respondent had authorised Mr Slade to instruct another and more senior barrister, this does not take the Appellant far enough. In short, while the presumption was rebuttable, there was no basis for finding that the presumption had been rebutted. Alternatively, it was open to the Judge to find that it had not been rebutted, as I find that the Judge implicitly did.
    1. I turn to ground 4. I have already commented that the Judge would have been well aware that budgeted costs cover the particular phase of the case and that here the costs for the phase of trial was £25,740 plus VAT. Ground 4 argues that the Costs Judge was wrong nonetheless to make use of counsel 1’s brief fee to limit the allowable recovery to £10,000 plus VAT, but in my judgment this part of the calculation was also well within the discretion or judgment which the Judge enjoyed.
    1. I am not persuaded by the argument in the Respondent’s Notice. As Mr Williams submitted, there would have been an opportunity in the interval between the Judge distributing his judgment in draft and the sealing of the Judge’s order for the Appellant, if the decision on counsel’s fees had been in their favour, to pay those fees and thus comply with Solicitors Act 1974 s.67(b).
Conclusion as to the parental litigation
  1. Although I have not accepted the argument in the Respondent’s Notice, it follows that I dismiss the appeal so far as it concerns the parental litigation.

THE SECOND POINT: WHO HAD TERMINATED THE RETAINER?

At first instance the Master had found that it was the solicitor and not the client that had terminated the retainer.  This meant that the solicitor was not entitled to the fees claimed.

THE SOLICITOR’S UNSUCCESSFUL APPEAL
    1. In my judgment, there was no material misunderstanding of the evidence by the Judge. He was right to say that both the Appellant and the Respondent linked the issues regarding the parental litigation and Hodders.
    1. In my view the Judge was also entitled to reach the factual conclusions that he did. Mr Williams argued that his grounds of appeal involved matters of law which an appellate court would (and should, if wrong) overturn with less circumspection than findings of fact. Put baldly, that is right. But, as is so often the case, conclusions as to the law, can (and in this case do) rest on factual conclusions. In my view the Judge’s conclusion as to what the Respondent did is an example of such a finding.
    1. Put another way, in my view the Judge was entitled to find that the Respondent had neither terminated the Conditional Fee Agreement nor done what amounted to a repudiatory breach of that agreement. Nor do I agree with the Appellant that the correspondence showed an irretrievable breakdown in the necessary relationship of trust and confidence. In modern times, solicitors have to accept that complaints (whether of poor service or as to fees) go with the territory of professional practice.
  1. I consider that the Judge’s findings in this regard were reinforced by the correspondence in October 2018, even if, the ‘without prejudice’ email is disregarded.