THE SCOPE OF A SOLICITORS ACT ASSESSMENT: DISPUTED EVIDENCE IS “GRIST TO THE MILL”
In Jones -v- Richard Slade & Co Ltd  EWHC B28 (Costs) Costs Judge Rowley rejected the defendant’s application to strike out points of claim in a Solicitors Act application. The judge held that it was possible, in a hearing held under the Act, for the court to determine allegations of undue influence due to economic duress. A copy of the case is available here.
“ Disagreements as to who said what to whom are grist to the mill in Solicitors Act proceedings”
The claimant issued Part 8 proceedings under the Solicitors Act 1974 seeking assessment of a number of bills of costs. A directions hearing took place and the District Judge made an order for several matters to be determined as a preliminary issue.
“(i)the legal status of the Defendant’s retainer; and
(ii)the legal status and effect of the agreement recorded by an email exchange between the Claimant and Richard Slade on 10 June ”
THE DEFENDANT’S APPLICATION
The defendant issued an application to strike out parts of the points of claim on the grounds that the court had no jurisdiction, in a hearing under the Solicitors Act, to determine the claimant’s assertions that an agreement should be set aside because of economic duress.
“Having served Points of Defence to the Points of Claim served by the claimant, the defendant decided to issue an application dated 9 July 2021 seeking:
“an order in the form attached striking out or staying point 2 of the Claimant’s points of claim dated 26 May 2021 (pursuant to CPR rules 3.4(2) or 3.1(2)(f)) on the basis that it discloses no reasonable grounds for bringing that part of the Claimant’s claim.”
4. At paragraph 10 of the application notice, the defendant outlined its reasoning for the application in the following terms:
“1. This is a claim for relief under Part III of the Solicitors Act 1974 (“the Act”).
By point 2 of her points of claim dated 26 May 2021 the Claimant claims that the settlement agreement dated 10 June 2020 should be set aside on the grounds of undue influence or economic
The remedy sought is not one that the court has jurisdiction to give in proceedings under the Act and that part of the Claimant’s claim should be struck out or stayed accordingly.”
THE JUDGE’S REJECTION OF THE DEFENDANT’S APPLICATION
The judge rejected the defendant’s application. Issues such as these could be heard in the course of a Solicitor’s Act application.
Discussion & Decision
14. It is commonplace for challenges by clients to their former solicitors’ bills of costs to traverse a fine line between complaints about matters such as a failure to adhere to estimates on the one hand and being professionally negligent on the Costs judges are regularly told that the matters in issue would be better served by being dealt with via Part 7 proceedings in other courts. I agree with Mr Williams that the cases referred to do not attempt to delineate an exact line save, I would suggest, in respect of matters that clearly concern professional negligence. Where such matters exist, cases involving Solicitors Act proceedings are conventionally stayed until those professional negligence proceedings are concluded. Other than for such cases, however, I would respectfully suggest that some of the dicta in the cited cases potentially muddies the waters rather than clarifies them. For example, in the Drukker case, the claimant had pursued the pre-action protocol in relation to professional negligence but then not actually pursued any court proceedings. Instead, “wholesale” allegations of professional negligence were put in the points of dispute in the Solicitors Act proceedings and in the circumstances the costs judge was correct to decline to deal with them. That, I would suggest, is the conventional route.
15. But the judge described there being “such wide-ranging criticisms of the solicitors’ conduct” that it affected not “just individual items in the bill of costs” but “went to the heart of the ” retainer
15. Since the advent of the so-called “costs wars” at the beginning of this century, allegations regarding retainer issues which potentially knock out the entire claim have regularly been dealt with in costs proceedings, both between the parties and between solicitor and client. As such, I would suggest that matters which go to the heart of retainer are no longer a reliable indication of the sort of case which ought to be dealt with in the High Similarly, some of the issues identified by Teare J in Stephenson Harwood are commonly dealt with in costs proceedings. Matters such as a breach of fiduciary duty are regularly being dealt with by costs judges and indeed district judges in district registries before sometimes being appealed to High Court Judges and above.
16. This is perhaps not surprising given that the relationship between the solicitor and client is fundamentally a contractual one and the “retainer” is based on a contract, albeit with various duties, fiduciary, statutory and otherwise being implied within its terms. In the circumstances, it does not seem to me to be obvious that an argument that a contract should be set aside should of itself ring alarm bells suggesting that proceedings ought to be dealt with in a Chancery Court via a different procedure. This is all the more so given the express requirement of “costs officers” to examine non-contentions and contentious business agreements to determine whether they are fair and reasonable. Depending upon that determination, the (Non-)CBA would either be upheld or set aside under the Solicitors Act.
18. There are clearly boundaries beyond which costs proceedings will not be appropriate as a forum to deal with contractual and equitable remedies. As is often the case, the decision as to the suitability of the court and its procedure is very much fact dependent.
19. In this case, for example, Mr Williams made great play of the elements needed to demonstrate economic duress and the extent of the disclosure required from the claimant to show how that had occurred and the extent of the losses that would be It may well be that, as a general approach to such claims, Mr Williams is right. But in the context of this claim, it is plain that the claimant says she accepted the agreement on the basis that, if she did not do so, she would be exposed to a rather greater costs liability from the defendant. It does not seem to me that the extent of disclosure et cetera required to support that argument is beyond the scope of supportive documents that are often exhibited to witness statements in preliminary issues hearings on matters such as reliance on estimates. Indeed, it may be that all of the documents upon which the claimant wishes to rely have already been exhibited to the statement of Mr Carlisle made on behalf of the claimant in response to this application.
20. Similarly, Mr Williams submitted that the purpose of section 70 Solicitors Act proceedings was to have an assessment of the defendant’s He described the remedy claimed of rescission of the contract of compromise were a million miles away from an assessment. If the claimant were seeking equitable remedies as a result of setting aside the contract, then again I think Mr Williams would have been on firmer ground with this argument. But the only purpose of seeking to set aside the compromise is so that the claimant can then have the defendant’s bill of costs assessed under section 70. It is no more than an obstacle on the way to that assessment. In such circumstances I do not see that the remedy sought in relation to the contract is one which requires a specialist Chancery Court to determine it. In this context, I refer to Foskett on Compromise at paragraph 12-02 which, under the heading “Setting aside a compromise agreement” says the following:
“The procedure for seeking a judicial rescission of the compromise agreement is identical to that required in relation to any other contract. A fresh action is needed seeking an order setting aside the agreement with consequential directions.”
21. The authors of that paragraph described the principal remedy sought as being either a declaration of invalidity or an order setting aside the It is precisely that latter remedy which is sought here. The terminology of the procedure being the same as is required “in relation to any other contract” suggests that it is not a jurisdiction closely held by one part of the judicial structure.
22. If proceedings had been commenced in, for example, the Chancery Division, to set aside the contract of compromise, then there is no prospect of those proceedings having been transferred to the SCCO simply because the context of the agreement is one relating to But this is very much a case, in my view, where a number of judges in various courts could equally have been properly seised of the case. I note, in passing, that the parties were content with this case being transferred to a cost judge at the SCCO and, indeed, prior to the hearing before DJ Bellamy, the suggestion was that directions should be dealt with by the master who was going to hear the preliminary issues. The defendant is clearly entitled to change his mind having seen the way the claimant puts her case but, given that the wording of the preliminary issues has not altered, it seems to me to be an uphill battle to suggest that those issues can no longer be dealt with in the court previously agreed upon between the parties.
23. Notwithstanding Mr Williams’ customary eloquence on his client’s behalf, I do not consider that the nature of the claim and the remedies sought are ones outside this court’s jurisdiction (and I note that there is nothing in Mr Williams’ submissions which actually points to a formal lack of jurisdiction). Nor do I consider that he has pointed to procedural shortcomings in the Solicitors Act proceedings which require Part 7 proceedings elsewhere to decide matters concerning the agreement that is at the heart of this case.
24. Disagreements as to who said what to whom are grist to the mill in Solicitors Act proceedings. They do not by any means have to amount to the serious misconduct described by Mr Williams. They also relate to disputes regarding the contractual arrangements between the parties and not simply issues with the bill that has been delivered. There is no significant difference between a contract of compromise and a contract of retainer – particularly one for a fixed sum – in my view.
25. For these reasons I do not think that it would be appropriate to strike out any part of the claimant’s Points of Claim, even if they were formal pleadings which I think is open to some The Points of Claim are intended to be expository and they appear to have assisted the defendant in understanding the claimant’s argument on the preliminary points which I have no doubt was the intention behind DJ Bellamy’s direction.
Further clarification, if it is needed, should arise from the witness evidence and, subsequently from the skeleton arguments. New dates will be required for these procedural steps. DJ Bellamy ordered mutual exchange of witness evidence. I express the view, provisional though it is in the absence of any argument from the advocates, that the usual order of claimant first and then defendant appears to be the more appropriate in this case in relation to the witness evidence. Anticipatory comment, dressed up as evidence, is very unlikely to assist in the disposal of this case.
Finally, Mr Williams scented a potential recasting of the Points of Claim. I should say that, in my view, amendment of a document specifically ordered by the court in proceedings does not fall within the usual ability of parties to amend, for example, points of dispute and replies, without requiring the court’s permission under PD47 paragraph 13.10. There has been some reliance in this judgment on the scope of the claimant’s arguments and if they were to be altered materially, then that would require approval of the court.
The Defendant’s application is therefore dismissed.