Keith Billington v Downs Solicitors LLP
| Jurisdiction | England & Wales |
| Judge | Master Leonard |
| Judgment Date | 16 January 2012 |
| Neutral Citation | [2012] EWHC 90219 (Costs) |
| Date | 16 January 2012 |
| Court | Senior Court Costs Office |
| Docket Number | SCCO Reference: CL 1006206 |
[2012] EWHC 90219 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Clifford's Inn, Fetter Lane
London, EC4A 1DQ
Master Leonard
SCCO Reference: CL 1006206
Mr Christopher Perry (Counsel instructed by Hallows Associates) for the Claimant
Mr Alex Glassbrook (Counsel instructed by Downs Solicitors LLP) for the Defendant
Hearing date: 7 November 2011
This is an assessment between solicitor and client, ordered under Section 70 of the Solicitors Act 1974. The bills to be assessed, including VAT, are as follows:
| Date | Bill No | Amount (including VAT) |
| 24 September 2008 | DS1019 | £5,287.50 |
| 25 November 2008 | DS1931 | £1,762.50 |
| 30 April 2009 | DS3969 | £18,047.57 |
| 8 May 2009 | DS4048 | £5,566.00 |
| 12 June 2009 | DS4555 | £10,995.00 |
| Total: | £41,658.57 |
The Claimant's part 8 application, showing a smaller total, understates the amount of bill DS3969 (by including only the balance shown as outstanding) and overstates the amount of bill DS 4048.
Breakdowns of the above bills, (amended) Points of Dispute and Replies have all been served as ordered. In an Order dated 10 August 2011, I provided for "general points 3 and 4 in the Claimant's Points of Dispute" to be disposed of as preliminary issues.
In the Points of Dispute as amended, "general point 3" encompasses the arguments numbered 3, 4 and 5 in the Points of Dispute, raising arguments in relation to estimates of costs. General point 4 raises a different issue, not addressed in the parties' submissions to me or in this judgment. It remains to be addressed in a subsequent hearing.
General Point 3: the Claimant's Case
The Claimant instructed the Defendant to act on his behalf in defending proceedings brought by his daughter's partner in the Reigate County Court, seeking the recovery of sums lent by him to the Claimant ("the loan claim"). I am well aware that the Claimant denies that any valid loan arrangements were made, but in giving judgment against the Claimant in that respect, Mr Recorder Soole QC found that they were.
I would summarise general point 3 in these terms. The Claimant says that he instructed the Defendant to act on condition that costs were kept within a cap of £20,000, that the Defendant accepted instructions on that basis, expressly confirming that total costs would not exceed that amount, and that there was never any agreement to vary that figure.
Alternatively, the Claimant having provided the Defendant with "clear and precise instructions" that costs should be kept to the maximum of £20,000, the Defendant confirmed in writing that it would be able to take the matters to the end of trial well within that figure. In doing so, the Defendant provided an estimate of costs upon which the Claimant relied. Subsequent increased estimates were simply attempts to justify an increase over the original and no adequate explanation for the very substantial increase in costs has been given. Accordingly, the Claimant submits that any costs incurred above the original estimate are unreasonable and irrecoverable. The Claimant refers to Mastercigars Direct Ltd v Withers LLP [2007] EWHC 2733 (Ch), Reynolds v Stone Rowe Brewer (a firm) [2008] EWHC 497 (QB), Leigh v Michelin Tyre plc [2003] EWCA Civ 1766 and Wong v Vizards [1997] No 2 Costs LR 46.
The Points of Dispute also argue that, in failing to comply with the Solicitor's Code of Conduct 2007 (in particular its requirements for the provision of costs information) the Defendant leaves itself open to the argument that "a breach of the … code can render a retainer unenforceable and/or illegal". By reference to Garbutt v Edwards [2005] EWCA Civ 1206) the Defendant argues that the Court has a discretion to disallow costs on the basis of "a complete breach of the indemnity principle".
In its Replies to the Points of Dispute the Defendant says that this point is misconceived; this is not the forum within which to raise regulatory matters, and the reference to Garbutt is misconceived. I do not (as I have been invited to do) read into that Reply any implicit admission that there has actually been any breach of professional standards.
The suggestion that the contract of retainer is unenforceable was not actively pursued in submissions. I am unaware of any sound basis for reaching that conclusion: Garbutt does not support it. In Mastercigars (at paragraphs 107–111) Mr Justice Morgan expressly rejected a submission to the effect that there should be implied into a contract of retainer any requirement for a solicitor to comply with the professional regulatory provisions applicable at the time. I see no basis upon which to distinguish this case.
It does not follow that the requirements of the Code of Conduct have no bearing whatsoever upon what a client should reasonably pay, if only because a solicitor can be expected to comply with the professional obligations imposed by the code. I have referred to that where it appears to be relevant.
Before I continue I must address an argument raised by Mr Glassbrook in his submissions for the Defendant. He submitted that, as the Points of Dispute state only that the Defendant's entitlement to costs must be limited to the sum of £20,000, it is not open to me — at least on the Points of Dispute as currently drafted – to make any finding other than that the Claimant's liability to pay is or is not so limited.
I am unable to accept that submission. The authorities expressly referred to and relied upon by the Defendant (in particular Mastercigars) leave it open to me to conclude that it is reasonable for the Claimant to pay only the amount for which the Claimant contends, or that it is reasonable for the Claimant to pay some larger amount.
The Defendant is not prejudiced by my taking that approach. The Defendant's own case is that the figure upon which the Claimant relies was an estimate. The evidence and submissions heard by me addressed the fees and disbursements which accrued as the Defendant managed the defence of the loan claim, the costs information supplied by the Defendant to the Claimant from time to time, and the way in which the parties understood and dealt with that information. Mr Storar, the witness for the Defendant, came to the hearing armed with a detailed breakdown of costs as they accrued, designed to show exactly how and why costs accrued from time to time.
In any event, if I were to accept this argument the only effect would be to force the Claimant to make minor amendments to the Points of Dispute so that I could then address issues about which I have already heard evidence and submissions. I would not regard that as correct in principle or as compliant with the overriding objective.
The History of the Action
It is necessary to understand how the loan claim developed between the first meeting of the parties on 25 July 2008 and the termination of the Defendant's contract of retainer by the Claimant on 23 July 2009.
The loan claim, according to the limited information before me, was based upon two agreements dated 7 May 2004. The Claimant's daughter's partner claimed that money lent by him to the Claimant was to be repaid, with interest, from the proceeds of sale of a property and that the period for payment had expired. The Claimant contended that the loan agreements had not been validly executed, that the parties to the agreements never intended to be bound by them and that monies were in any event owed to him through other financial arrangements made in relation to the relevant property.
On 24 July 2008 the Claimant, who had been unrepresented, had attended the hearing of (I understand) a number of applications, including his opponent's application for the narrowing of the issues to be heard at trial, then listed for 10 September 2008 with a time estimate of two days. His opponent, who was represented by Counsel, was successful and the Claimant felt at a disadvantage. Accordingly he decided that he should seek legal representation to take the case to trial. On 25 July 2008 he met Mr Storar, a consultant with the Defendant, at the "Red House" in Reigate (the Claimant's home at the time) to discuss that.
Mr Storar was duly instructed. Although the Claimant says in his witness statement of 26 March 2011 that counsel was not instructed at this stage it seems evident that counsel, Mary Glass, was instructed within a matter of weeks and advised that an amendment to the Defence and Counterclaim and further directions were needed. An application was made for permission to appeal against the District Judge's order, permission to rely upon the amended Defence and Counterclaim and for further directions. Permission to reply upon the amended Defence and Counterclaim was given on 2 September 2008. The appeal was withdrawn and the trial relisted for three and a half days in a window commencing 28 October 2008.
In December 2008, that window was also vacated and a trial window set for 26 January 2009 for 12 weeks. The matter was then listed for trial from 9 to 12 March 2009, but due to the illness of the Claimant (who underwent surgery on about 10 February 2009 and was not fit to appear at trial) it was necessary to apply for another adjournment. That application, initially resisted, was eventually conceded and trial relisted for 3 to 8 April 2009. The time estimate remained at three and a half days.
In the meantime, the Defendant on behalf of the Claimant prepared further witness evidence and made appropriate arrangements for trial. This included an application to obtain evidence from Hallows, the solicitors who had acted on the original transactions that were the subject of the loan claim. Hallows took the view that they were unable to assist voluntarily with...
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