Helen Butler v Bankside Commercial Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice David Richards,Lady Justice Rose |
| Judgment Date | 27 February 2020 |
| Neutral Citation | [2020] EWCA Civ 203 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2019/0711 |
[2020] EWCA Civ 203
Lord Justice Lewison
Lord Justice David Richards
and
Lady Justice Rose
Case No: A2/2019/0711
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE, QUEEN'S BENCH DIVISION
Mr Justice Turner
QB/2018/0312
Royal Courts of Justice
Strand, London, WC2A 2LL
Imran Benson (instructed by Innovate Legal) for the Appellant
Simon Browne QC & Alex Young (instructed by Bankside Commercial Limited) for the Respondent
Hearing date: 18 February 2020
Approved Judgment
Introduction
The issue on this appeal is the interpretation of a provision in a standard form of conditional fee agreement (a “CFA”) made on Law Society terms. The term in question entitles the solicitors, on termination of their retainer in certain circumstances, to payment both of their basic charges and disbursements and also their success fee if the client goes on to win her claim. What is in dispute is what triggers that entitlement. The relevant provision of the CFA expresses the trigger event as follows:
“We can end this agreement if you reject our opinion about making a settlement with your opponent.”
In a nutshell, Mrs Butler had a claim for damages against Metris arising out of the termination of a commercial agency. She entered into a CFA with Bankside Commercial Ltd on terms which included the above. Metris made an offer of settlement of €90,000. Bankside advised her to make a counter-offer of €90,000 plus 50 per cent of her costs. Mrs Butler did not respond to that advice. Bankside then wrote to her stating that if they did not receive final instructions by a specified deadline, they would treat their retainer as brought to an end in accordance with the CFA. Again, Mrs Butler did not respond. Bankside terminated the retainer; and Mrs Butler proceeded with her claim with different solicitors. Ultimately, she achieved an arbitration award of a little more than £40,000.
Bankside then presented her with a bill. On a detailed assessment between Mrs Butler and Metris, Bankside's allowable costs (including profit costs, success fee, disbursements and ATE premium) were quantified at £238,527-odd. It subsequently emerged that Mrs Butler had already paid some of the disbursements. That left a balance of £209,518-odd. There is no dispute about quantum. The dispute is about whether the terms of the CFA triggered Mrs Butler's liability to pay it. Bankside claimed that sum under the terms of the CFA. Master Yoxall gave summary judgment for that sum in their favour; and Turner J dismissed Mrs Butler's appeal. The judge's judgment is at [2019] EWHC 510 (QB), [2019] 1 Costs LR 169.
The CFA
The CFA was made as long ago as June 2008. It began by stating that it was a legally binding contract and that it “must be read in conjunction with the Law Society document “What you need to know about a CFA”.” Under the heading “Paying us” it stated:
“It may be that your opponent makes a Part 36 offer or payment which you reject on our advice, and your claim for damages goes ahead to trial where you recover damages that are less than that offer or payment. If this happens, we will not claim any costs for the work done after we received notice of the offer or payment.”
The remaining terms about payment are, for the most part, contained in the Law Society document. It is common ground that they are incorporated into the CFA. Under the heading “What do I pay if I win?” the document refers to the possibility of a Part 36 offer or payment and continues:
“Refer to the “Paying Us” section in the CFA document to establish costs we will be seeking…”
Under the heading “Ending this agreement” it states:
“If you end this agreement before you win or lose, you pay our basic charges and disbursements. If you go on to win, you also pay a success fee.”
Under the heading “What happens when this agreement ends before your claim for damages ends?” it states:
“(a) Paying us if you end this agreement
You can end this agreement at any time. We then have the right to decide whether you must:
• pay our basic charges and our disbursements including barristers' fees but not the success fee when we ask for them; or
• pay our basic charges, and our disbursements including barristers' fees and success fees if you go on to win your claim for damages.
(b) Paying us if we end this agreement
…
(iii) We can end this agreement if you reject our opinion about making a settlement with your opponent. You must then:
• pay the basic charges and our disbursements, including barristers' fees;
• pay the success fee if you go on to win your claim for damages.
If you ask us to get a second opinion from a specialist solicitor outside our firm, we will do so. You pay the cost of a second opinion.”
The rival interpretations
The argument for Mrs Butler is that there are two possible meanings to be given to the phrase: “if you reject our opinion about making a settlement with your opponent.” The broad meaning encompasses an opinion about the client making an offer. The narrow meaning is limited to an opinion about something which would directly result in the making of a settlement. In practice that would be restricted to advising the client to accept an offer of settlement made by their opponent.
The argument for Bankside is that the clear and natural meaning of the phrase is that it encompasses advice about settlement with an opponent, including advising the client to make their own settlement offer. There is no reason for departing from that clear and natural meaning.
The judgment
In an admirably concise and clear judgment, the judge accepted Bankside's interpretation. At [19] he said:
“I am satisfied that the suggestion that any opinion about “making a settlement” is to be construed as being limited to the consideration of the acceptance [of] any offers made by the opponent is inconsistent with the language of the clause and would, in any event, lead to procedural distinctions devoid of either logical justification or practical coherence.”
He went on to point out the differences between a case where there is no CFA, in which case the client is entitled to ignore the advice of her solicitors, and a case governed by a CFA where the solicitors themselves are at financial risk. He said at [22]:
“Where, however, there is a CFA under which the solicitors, themselves, face significant economic risks in the event of an adverse result at trial, one would not expect the level of protection which they are afforded against the whims of the unreasonably...
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