Minkin v Cawdery Kaye Fireman & Taylor
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WARD,Lord Justice Stanley Burnton,Lord Justice Elias |
| Judgment Date | 01 May 2012 |
| Neutral Citation | [2012] EWCA Civ 546 |
| Docket Number | Case No: A2/2012/0470 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 May 2012 |
[2012] EWCA Civ 546
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
MR JUSTICE CRANSTON
QB/2010/589
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Ward
Lord Justice Stanley Burnton
and
Lord Justice Elias
Sitting With
Senior Costs Judge Master Hurst as an Assessor
Case No: A2/2012/0470
Mr Bernard Livesey QC and Mr Joshua Munro (instructed by CKFT) for the appellant
Mr Nicholas Bacon QC and Mr Mark James (instructed by Routh Clarke Solicitors) for the respondent
Hearing date: 18th January 2012
Approved Judgment
Every solicitor will encounter, in one way or another, the kind of problem which gives rise to this appeal. The solicitor is instructed to conduct certain litigation on the client's behalf. He gives his best estimate of the cost of doing so. He asks for a payment on account. The litigation becomes more complicated than had been envisaged. The estimate is exceeded. More money is requested on account. The client is by now dissatisfied with the service he has been receiving and believes that the costs are excessive and that the solicitor is achieving nothing. The fractious relationship is terminated and the solicitor's bill is assessed. Then—and this may be the unexpected turn of events, at least from the solicitor's perspective—the costs judge conducting the assessment concludes that it was the solicitor who wrongfully terminated the retainer and did so before the litigation had come to its end. Not having performed an entire contract, the solicitor is entitled to no further fees: indeed he must repay the fees he has already received on account. That was the thrust of the judgment of Master O' Hare Costs Judge made on 16th September 2010 in favour of the client Mr Gary Minkin against the solicitors Cawdery, Kay, Fireman & Taylor trading as C.K.F.T, upheld on appeal by Cranston J., sitting with assessors, on 7th February 2011. It seemed to me that clarifying what solicitors can and what they cannot do was a compelling enough reason to grant permission for this second appeal.
Let me first set the background. Underwood, Son & Piper v Lewis [1894] 2 Q.B. 306 is an established authority. Lord Esher M.R. said at 309:
"When one considers the nature of a common law action, it seems obvious that the law must imply that the contract of the solicitor upon a retainer in the action is an entire contract to conduct the action till the end. When a man goes to a solicitor and instructs him for the purpose of bringing or defending such an action, he does not mean to employ the solicitor to take one step, and then give him fresh instructions to take another step, and so on; he instructs the solicitor as a skilled man to act for him in the action, to take all the necessary steps in it, and to carry it on till the end. If the meaning of the retainer is that the solicitor is to carry on the action to the end, it necessarily follows that the contract of the solicitor is an entire contract–that is, a contract to take all steps which are necessary to bring the action to a conclusion."
A.L. Smith L.J. added at p. 314:
"…prima facie the contract of the solicitor, when he accepts a retainer in a common law action, is an entire contract to carry on the action till it is finished and he cannot sue for costs before the action is at an end. On the other hand, it is clear that the solicitor may be placed in such a position by the client as to absolve him from any further performance of the contract.…the client may put the solicitor in such a position as to entitle him to decline to proceed; for instance, if the solicitor asks for necessary funds for disbursement, and such funds are refused by the client, the solicitor is not bound to go on; and, speaking for myself, I should say that the solicitor is not bound to go on acting for the client if the client insists on some step being taken which the solicitor knows to be dishonourable; and many other cases may be supposed in which the solicitor may be entitled to refuse to act for the client any further."
The solicitors' profession is, of course, now heavily regulated. The Solicitors Act 1974 contains these relevant provisions:
"65(2) If a solicitor who has been retained by a client to conduct contentious business requests the client to make a payment of a sum of money, being a reasonable sum on account of the costs incurred or to be incurred in the conduct of that business and the client refuses or fails within a reasonable time to make that payment, the refusal or failure shall be deemed to be a good cause whereby the solicitor may, upon giving reasonable notice to the client, withdraw from the retainer.
…
69(1) Subject to the provisions of this Act, no action shall be brought to recover any costs due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered in accordance with the requirements mentioned in subsection (2)…
70(1) Where before the expiration of one month from the delivery of a solicitor's bill an application is made by the party chargeable with the bill, the High Court shall, without requiring any sum to be paid into court, order that the bill be assessed and that no action be commenced on the bill until the assessment is completed.
(2) Where no such application is made before the expiration of the period mentioned in subsection (1), then, on an application being made by the solicitor or, subject to subsections (3) and (4), by the party chargeable with the bill, the court may on such terms, if any, as it thinks fit (not being terms as to the costs of the assessment), order—
(a) that the bill be assessed; and
(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the assessment is completed.
(3) Where an application under subsection (2) is made by the party chargeable with the bill—
(a) after the expiration of 12 months from the delivery of the bill,…
no order shall be made except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the assessment as the court may think fit."
Solicitors are also bound by the Code of Conduct issued by the Solicitors Regulation Authority, the material Code being that published in 2007, not the present Code of 2011. Although it is common ground that the terms of the Code are not implied into the retainer, the provisions are nonetheless instructive. They include these rules on client relations:
"2.01(1) You are generally free to decide whether or not to take on a particular client.…
(2) You must not cease acting for a client except for good reason and on reasonable notice."
There is also guidance on ceasing to act:
"A client can end the retainer with you at any time and for any reason. You may only end the relationship with the client if there is a good reason and after giving reasonable notice. The retainer is a contractual relationship and subject to legal considerations. Examples of good reasons include where there is a breakdown in confidence between you and the client, and where you are unable to obtain proper instructions.
9. If there is good reason to cease acting, you must give reasonable notice to the client. What amounts to reasonable notice will depend on the circumstances. For example, it would normally be unreasonable to stop acting for a client immediately before a court hearing where it is impossible for the client to find alternative representation. In such a case, if there is no alternative but to cease acting immediately, you should attend and explain the circumstances to the court…There may be circumstances where it is reasonable to give no notice."
I must now set out in a little more detail the circumstances giving rise to the retainer in this case and its termination. Instructions seem to have been given on 26th June 2009 when Mr Gary Minkin, the client, was in the throes of divorce proceedings though quite what stage they had reached is not clear on the papers before us. It does not much matter. His problem at that time was that his wife had brought proceedings in the County Court for a non-molestation injunction and a so-called ouster order to exclude him from the former matrimonial home. Her application was returnable on 28th July 2009 and the client wished Mr Philip Cooper, a solicitor in the Litigation/Family Law Department of CKFT, to advise him and represent him in those applications. They had a discussion that day. The client made his position known and to keep costs down, the solicitor advised instructing junior counsel at a reduced fee. He considered that costs were likely to be £3,000 plus VAT, saying in an email of that day:
"I doubt very much that we can do this cheaper and I understand it is a sizeable sum. You have agreed to transfer £2000 to us now and the balance prior to the hearing (as advised we must have the full amount prior to attending Court on your behalf)."
That initial payment of £2,000 was duly made.
These instructions were confirmed on 14th July when Mr Cooper sent his client care letter with the firm's standard terms of business which were accepted in writing by Mr Minkin the following day. The letter assured the client that the firm always sought to work as economically as possible without compromising their standards. Fees were to be calculated principally by reference to the time spent during the work on the client's behalf. Hourly charging rates were set out. Paragraph 2 of the letter under the heading "Fees" continued:
"Generally, it is extremely difficult to estimate the total costs or the number of hours that will need to be expended to bring a case such as yours to a conclusion.
However, our overall charges and expenses for this matter are likely to be £3,500 plus VAT. I will try to keep costs down...
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Case Law Update 2012 - Issue 5
...it could do so under CPR Part 3.1 (z)(m) where just and reasonable. Costs estimate exceeded Minkin v Cawdery Kaye Fireman & Taylor [2012] EWCA Civ. 546 CA The CA overturned the finding of the High Court that a client had been entitled to withhold payment of a solicitor's bill of costs b......