COST BITES 252: WHEN CAN A SOLICITOR PROPERLY TERMINATE A RETAINER? WAS THE CLIENT “THROWN TO THE LIONS”?

Here we are looking at a very small part of a judgment in relation to costs on a solicitor/own client assessment. On of the arguments put forward by the (former) client was that the retainer was wrongfully terminated shortly before a hearing and that they were “thrown to the lions”. It may be of double interest to “cost bods” in that, in part,  this is an assessment about costs incurred in representing the claimant at an assessment.  Those interested in these issues can read about the advice being given and decisions being made in seeking a review of a provisional assessment, choice of counsel and the solicitor’s decision to terminate the retainer.

”  I do not consider the Claimant was “thrown to the lions” … Payment of bills, discharging payments on account, or making payments to discharge disbursements are all common features of retainers and non-payment is also a common clause leading to termination in the form of ceasing to act.”

KEY PRACTICE POINTS

One feature of this case, if you read the full decision, is the careful recording of the advice given to the client, including the decision (against the solicitor’s advice) to instruct leading counsel. It is worthwhile remembering that a client is always fully entitled to seek an assessment of costs. The second point is, obviously, that if you need to terminate a retainer it must be done in circumstances where there cannot be an allegation that the client is given reasonable notice.  The solicitor’s conduct in this case was found to be reasonable.

THE CASE

Evans v Acuity Law Ltd [2025] EWHC 1661 (SCCO), Costs Judge Nagalingam

THE FACTS

The claimant brought a Solicitors Act assessment against the defendant, his former solicitors.  The judge here was determining certain preliminary issues.

THE CLAIMANT’S ARGUMENT ON TERMINATION

The defendant terminated its retainer two days before a hearing, an oral reassessment of costs.   The claimant was arguing that this was unreasonable behaviour and the costs should be assessed at nil.

“64. Mr Carlisle submits that termination of a retainer two or less days before a hearing is not reasonable. He says that the Claimant was effectively “thrown to the lions” at the 12 January 2023 hearing.

65. He cited Gill v Heer Manak Solicitors [2018] EWHC 2881 (QB) and principles of a “binding deal”, in particular paragraphs 13, 19 and 22:

“13. A solicitor’s retainer to conduct litigation is an example of what, although known as an “entire contract” , is better described as involving an “entire obligation”: see Vlamaki v Sookias and Sookias [2015] EWHC 3334 (QB); [2015] 6 Costs LO 827 at paragraph 10. The “entire obligation” is, in effect, a condition precedent which must be satisfied before remuneration can be claimed: a solicitor can generally only claim remuneration when all work has been completed, or when there is a natural break. That, however, is subject to a common law exception and to any agreement to the contrary.”
“19. In Underwood, Son & Piper v Lewis [1894] 2 QB 306 the Court of Appeal discussed the circumstances in which a solicitor may be entitled to terminate a retainer. Lord Esher MR noted that there may be cases in which a solicitor was entitled to say that the retainer must come to an end. He added:
But it has been held that in such a case a solicitor cannot throw his client over at the last moment which might be ruin to the client, and, even though the solicitor may have good cause for declining to act further for the client, he must give him reasonable notice of his intention to do so.”
“22. It is not disputed by the firm that the same principles apply to the termination provision in the retainer. It is essential that such notice as is given is “reasonable”. If the notice is not “reasonable” then the firm cannot point to any applicable provision departing from the general principle that remuneration can only be claimed when all work has been completed, or when there is a natural break. In the absence of reasonable notice, the firm would accordingly be unable to claim for the costs which were sought before the master.”

66. In the index matter, Mr Carlisle maintained that two days was “plainly unreasonable notice” and as a consequence the Defendant failed to fulfil its entire obligation. Instead, the Defendant was demanding payment two days before a hearing at which the Claimant would be otherwise unrepresented.

THE DEFENDANT’S ARGUMENTS IN RESPONSE

114. The Defendant had been trying for some time to convince the Claimant to stand down and the chronology of events up to termination is relevant, including the fact work had been done which the Claimant was then refusing to pay for. Mr O’Connor submits that alone was a reason to terminate, especially when the Defendant was otherwise being required to incur even more costs.

115. Mr O’Connor submits that the Claimant had enough time to find new representation or could have competently represented himself. The Claimant had options.

116. As to the reasonableness of retainer termination and amount of notice provided, Mr O’Connor referred me to various communications between the parties.

117. A note of attendance on 4 and 5 January 2023 is instructive, stating:

“HR engaged on several telephone calls with Paul and conversations to discuss the present position. I reiterated my cost benefit concerns about the position that Paul was adopting and in particular the very significant risk in my view in firm likelihood that he would end up in a worse financial position by virtue of persisting with the challenge.
This is because he has got to beat the offer by 20% and a part 36 offer to make it worthwhile, which is not an insignificant reduction in the current Bill of Costs. We went back and forth on this saying that the key to costs were not included in the indemnity cost order. I explained I understood the point Paul was trying to get across, but I disagreed with his view on the breadth of the Order (it is wider than he considers) and also our opponent will say that the only sums included within the bills are sums they were allowed to claim under the cost order, ie. they don’t go outside of the bandwidth of the cost order.”
Mr O’Connor also relies on e-mails around 10 and 11 January 2023 which demonstrate the Claimant had engaged Kain Knight to replace the Defendant, and dealt with the administrative elements of that transfer including transfer of monies to Kain Knight.

118. An e-mail on 10 January 2023 to the Claimant sought to stress that counsel could not be instructed absent sufficient monies on account to cover counsel’s fee but that “I have just received a call from Guildhall indicating they had their colleague had just spoken to someone to indicate that you wish to proceed with Oliver Moore. As this call follows our conversation whereby, I indicated that we would not be able to instruct Oliver(or Robert) in circumstances where we would not be in possession of monies on account, and in circumstances where Oliver does not accept instructions via direct access, I therefore assume Kain Knight have given the go ahead to instructing him via themselves.”.

119. Mr O’Connor submits the context of the Defendant’s desire to come off the record is therefore important. The Claimant was being represented by Kain Knight, and counsel was ready and waiting to attend the hearing (subject to securities as to payment).

120. One of the lengthier e-mails of 11 January 2023 demonstrates the Defendant, whilst trying to come off the record, was still providing assistance such as ensuring that counsel for the oral review (who was by this stage being instructed via Kain Knight, who had recommended counsel Oliver Moore) and if nothing else had ensured the Claimant had advocacy representation at the oral review hearing (subject to counsel being reassured as to payment).

THE JUDGMENT ON TERMINATION

The judge held that the claimant had not been “throw to the lions”, but had been able to take over the reins of preparing for the hearing themselves.

“162. Whilst expanded upon in oral submissions, the pleaded point of dispute concerning termination is very brief.

163. The Claimant has not pointed to any clause in the retainer which precludes the Defendant from raising a bill following termination but in any event I do not consider the Claimant was “thrown to the lions” as suggested by Mr Carlisle.

164.Payment of bills, discharging payments on account, or making payments to discharge disbursements are all common features of retainers and non-payment is also a common clause leading to termination in the form of ceasing to act.

165. Perhaps most persuasive of all though is that at the time of the 12 January 2023 relisted oral review, the Claimant had demonstrably been in contact with Kain Knight and was already in the process of instructing / re-instructing them. The Claimant had also been engaging counsel directly and but for counsel not accepting direct access engagements, the Claimant would not have even needed the Defendant to confirm the instruction of counsel.”