Wilsons Solicitors LLP v Serena Bentine (Acting by her Litigation Friend, The Official Solicitor) (First Respondent) The Official Solicitor (Second Respondent)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sales,Sir Bernard Rix,Lady Justice Arden DBE |
| Judgment Date | 19 November 2015 |
| Neutral Citation | [2015] EWCA Civ 1168 |
| Docket Number | Case No: A2/2013/3189 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 November 2015 |
[2015] EWCA Civ 1168
Lady Justice Arden
Lord Justice Sales
and
Sir Bernard Rix
(Sitting with Senior Costs Judge Gordon-Saker as Assessor)
Case No: A2/2013/3189
Case No. A2/2014/0557
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MRS JUSTICE PROUDMAN
CH/2012/0628
Royal Courts of Justice
Strand, London, WC2A 2LL
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
MRS JUSTICE ANDREWS
QB/2013/0576
Mr Alexander Hutton QC (instructed by Wilson Solicitors LLP) for Wilsons Solicitors LLP
Mr Michael Kent QC & Mr Simon J Brown (instructed by the Official Solicitor) for Serena Bentine and the Official Solicitor
and
Mr John Foy QC & Mr Simon Butler (instructed by Berlad Graham LLP) for Stone Rowe Brewer LLP
Mr PJ Kirby QC & Mr Rupert Cohen (instructed by Just Costs Solicitors) for Just Costs Limited
Hearing dates: 28 and 29 July 2015
Introduction
There are two appeals before the court which were heard together. Both concern the operation of section 70(9) and (10) of the Solicitors Act 1974 ("the 1974 Act"). These provisions are part of the code contained in section 70 governing the resolution of disputes between a solicitor and a client regarding the fees charged by the solicitor in a bill sent to the client.
The 1974 Act is a consolidation Act. It was amended in various respects by the Legal Services Act 2007 ("the 2007 Act"). Section 70 of the 1974 Act, as amended, provides as follows:
"70 — Assessment on application of party chargeable or solicitor.
(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, or
(b) after a judgment has been obtained for the recovery of the costs covered by the bill, or
(c) after the bill has been paid, but before the expiration of 12 months from the payment 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.
(4) The power to order assessment conferred by subsection (2) shall not be exercisable on an application made by the party chargeable with the bill after the expiration of 12 months from the payment of the bill.
(5) An order for the assessment of a bill made on an application under this section by the party chargeable with the bill shall, if he so requests, be an order for the assessment of the profit costs covered by the bill.
(6) Subject to subsection (5), the court may under this section order the assessment of all the costs, or of the profit costs, or of the costs other than profit costs and, where part of the costs is not to be assessed, may allow an action to be commenced or to be continued for that part of the costs.
(7) Every order for the assessment of a bill shall require the costs officer to assess not only the bill but also the costs of the assessment and to certify what is due to or by the solicitor in respect of the bill and in respect of the costs of the assessment.
(8) If after due notice of any assessment either party to it fails to attend, the officer may proceed with the assessment ex parte.
(9) Unless—
(a) the order for assessment was made on the application of the solicitor and the party chargeable does not attend the assessment, or
(b) the order for assessment or an order under subsection (10) otherwise provides,
the costs of an assessment shall be paid according to the event of the assessment, that is to say, if the amount of the bill is reduced by one fifth, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs.
(10) The costs officer may certify to the court any special circumstances relating to a bill or to the assessment of a bill, and the court may make such order as respects the costs of the assessment as it may think fit.
[…]
(12) In this section "profit costs" means costs other than counsel's fees or costs paid or payable in the discharge of a liability incurred by the solicitor on behalf of the party chargeable, and the reference in subsection (9) to the fraction of the amount of the reduction in the bill shall be taken, where the assessment concerns only part of the costs covered by the bill, as a reference to that fraction of the amount of those costs which is being assessed."
As originally enacted, section 70(9) was in these terms:
"(9) Unless—
(a) the order for taxation was made on the application of the solicitor and the party chargeable does not attend the taxation, or
(b) the order for taxation or an order under subsection (10) otherwise provides,
the costs of a taxation shall be paid according to the event of the taxation, that is to say, if one-fifth of the amount of the bill is taxed off, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs."
(Emphasis added to indicate the differences from subsection (9) as it stood at the relevant time and currently).
Section 72 of the 1974 Act, as amended, sets out supplementary provisions as to assessments. Section 72(4) provides:
"(4) The certificate of the costs officer by whom any bill has been assessed shall, unless it is set aside or altered by the court, be final as to the amount of the costs covered by it, and the court may make such order in relation to the certificate as it thinks fit, including, in a case where the retainer is not disputed, an order that judgment be entered for the sum certified to be due with costs."
Section 70(9) and (10) regulates the costs position where there is a dispute between the solicitor and the client regarding the solicitor's bill for legal services provided by him and an order is made for the assessment of that bill by a costs officer. In the assessment proceedings the solicitor and the client are opposing parties, and costs may be incurred on each side in relation to the assessment proceedings to determine what sum is payable in respect of the bill.
Section 70(9) provides for a basic and simple default rule that the costs of the assessment should follow the event (i.e. be paid by the losing to the winning party), where the "event" (i.e. the criterion of who has won and who has lost) is defined by reference to whether a reduction in the amount of the bill of one fifth has been achieved by the client in the assessment (I refer to this as "the one fifth rule"). However, subsection (10) allows the court to modify this position where the costs officer certifies that there are "special circumstances relating to the bill or to the assessment of the bill."
Since 1986, the relevant costs officers (taxing masters or, now, costs judges) have dealt with all aspects of the assessment of bills of costs under section 70 of the 1974 Act, rather than certifying matters to be sent back to the High Court for further consideration. In modern practice, therefore, there tends not to be a formal certification of "special circumstances"; the costs judge conducting an assessment simply identifies any relevant special circumstances in the course of his ruling on the assessment and makes the appropriate order. This is a sensible way of proceeding, but care needs to be taken to ensure that the relevant "special circumstances" are properly identified in the ruling, if no formal certificate is to be drawn up.
Disputes between solicitors and clients regarding the amount of solicitors' bills can be substantial, and the costs of resolving them can likewise be substantial. For example, in the first of the appeals before us, that in the Bentine case, the assessment went on for 12 days in relation to solicitor's bills in the sum of about £145,000. Both client and solicitor benefit from knowing in advance what the basic default rule is governing the costs of an assessment, and what ordinarily counts as winning and losing, so that they can make a rational calculation of the risks involved in proceeding with a disputed assessment before a costs judge. The costs of conducting underlying legal proceedings may already be considerable, and it is in the interests of the parties and the court that the parties have a reasonable idea of where they stand before they incur yet more costs in arguing about those costs and that arguments about the incidence of the costs of arguing about costs should be kept within reasonable parameters in an effort to prevent them becoming disproportionate. In this context, reasonable protection for the expectations of the parties formed on...
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