Yvia Pulford v Hughes Fowler Carruthers Ltd
| Jurisdiction | England & Wales |
| Judge | Leonard |
| Judgment Date | 07 June 2023 |
| Neutral Citation | [2023] EWHC 1429 (SCCO) |
| Court | Senior Courts |
| Docket Number | Case No: SC-2022-BTP-000886 |
[2023] EWHC 1429 (SCCO)
COSTS JUDGE Leonard
Case No: SC-2022-BTP-000886
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Clifford's Inn, Fetter Lane
London, EC4A 1DQ
Stephen Innes (instructed by Overtons Costs Consultants Ltd) for the Claimant
Jack Holborn (instructed by Hughes Fowler Carruthers Ltd) for the Defendant
Hearing date: 27 February 2023
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
COSTS JUDGE Leonard
This is the detailed assessment of a series of bills rendered by the Defendants to the Claimant for representing her in divorce proceedings between 12 November 2018 and November 2020. According to evidence filed on behalf of the Defendant, the bills total £300,569.04. The last in the series, rendered on 7 December 2020, comes to £91,406.50 and remains unpaid.
I will offer a brief summary of the background. This is extracted primarily from the Defendant's witness evidence, which, for reasons I shall give, I accept.
The Claimant first consulted Frances Hughes, the senior partner of the Defendant firm, in March 2012. The Claimant was at that time provided with a retainer letter and standard terms of business. There was then some intermittent communication between the parties which terminated in October 2013. No proceedings were issued at that time.
On 5 November 2018, the Claimant contacted Ms Hughes again and they met on 12 November 2018. The Claimant, who was at the time amicably separated from her husband, wanted a divorce. She instructed the Defendant to initiate divorce proceedings and to deal with the ancillary relief and other matters that arose in consequence.
The Claimant's case was managed by Ms Hughes. Between March 2019 and March 2020 Ms Hughes was assisted primarily by Joseph Fennelly. From March 2020 onwards, Ms Hughes was assisted primarily by Kate Brett, a partner in the Defendant firm with greater seniority than Mr Fennelly.
The Claimant's former husband, Mr Pulford, was very wealthy and a great deal of work was, accordingly, undertaken in relation to the “ancillary relief” (financial settlement) aspect of the divorce proceedings. The retainer was terminated by the Claimant following a Financial Dispute Resolution (“FDR”) hearing on 24 November 2020.
An order for the assessment of all of the bills rendered by the Defendant to the Claimant was made by consent in February 2022. The Defendant then served a breakdown of the bills and the Claimant raised Points of Dispute against the breakdown. Provision was made for a number of issues raised in the Points of Dispute to be addressed as preliminary issues. I will set them out in some detail, because they do not always match the evidence given by the Claimant. I have paraphrased in an attempt to reduce their tendency to repeat the same points, and to put the events referred to into chronological order, which the Points of Dispute do not always do.
Point of Dispute 1
Whilst the parties have in the course of these assessment proceedings agreed to be bound by the Defendant's terms of retainer, the Claimant maintains that she did not see the Defendant's terms and conditions at the time that the retainer was entered into, and was not given a copy.
The Claimant says that she raised with the Defendant at the outset a concern that she might be required to pay the Defendant's fees and that she would be left penniless. She was told by Ms Hughes, between October and November 2018, that the overall likely costs of her divorce would be in the region of £80,000. The costs actually incurred exceed £300,000, without the Defendant having completed the work on her divorce.
The Claimant says that she relied upon that £80,000 estimate and from assurances from Ms Hughes that she would not have to bear such costs. Had she known the level of costs to be incurred, she would either have approached another law firm or potentially aborted the divorce. The Defendant was aware that the Claimant did not have means to meet the Defendant's legal costs at the time that she initially instructed the Defendant.
The Claimant refers to the Form H (a formal costs estimate) filed for the FDR on 24 November 2020, which put the Claimant's incurred costs at £298,009.54 with a further £356,520 to be incurred: a total of £654,529.54, which the Points of Dispute contrast with the initial alleged estimate of £80,000. They also contrast the figures in Mr Pulford's Form H which put his fees at £209,372.05 incurred with a further £198,000 to be incurred, and point out that those incurred costs included £61,000 paid by Mr Pulford for the majority of the experts' fees. Excluding that figure, Mr Pulford's incurred fees were about half the Claimant's.
The fees incurred by the Defendant were initially, by agreement, paid by Mr Pulford (until March 2019 to the Claimant, and thereafter directly to the Defendant). He withdrew that agreement in February 2020. The Claimant made payments to the Defendant thereafter, but she was not provided with any advance details of the Defendant's increasing costs and she only became aware of their costs in February 2020. The Defendant then rendered an invoice for £58,916.40. Given her belief that the overall costs of the matter would not exceed £80,000, this was a shock to the Claimant. The Defendant was aware that the Claimant was unable to pay the Defendant's fees from her own money and there should, she says, have been an effort at least to attempt to mitigate the level of costs being incurred.
The Claimant was not clearly told that there would be any circumstances where she would be required to pay the Defendant's fees. When she was eventually informed of that, she was assured by the Defendant and understood that payments she made to the Defendant would eventually be repaid by Mr Pulford in the divorce, so that she would never be required to pay. The Claimant has no familiarity with legal matters and placed her utmost trust in what was being told to her by the Defendant.
In any event, at that stage the Claimant would have expected to have been told how much the likely costs would be, given that she was now paying those costs. Although the Defendant prepared Forms H for a First Directions Appointment (“FDA”) in February 2020, which showed incurred costs of £77,642.60, and for the FDR in November as detailed above, the Claimant has no memory of seeing those documents, nor was their significance explained to her at all. The Claimant maintains that she should have been provided with this relevant paperwork, but that no record of that is to be found in the Defendant's files.
In the light of those matters the Claimant contends that there has been a significant departure from the estimates provided to the Claimant throughout the matter and that costs payable to the Defendant should be limited to the initial alleged estimate of £80,000.
Point of Dispute 2
In a slight variation from this Point of Dispute 1, Point of Dispute 2 says that it was not until April 2020 that the Claimant began paying the Defendant's fees, when Mr Pulford ceased doing so on the basis that the Claimant had inherited a sum of money. Point of Dispute 2 repeats the assertion that that was done on the understanding that the Claimant would be repaid those sums.
In email exchanges with Ms Hughes between 8 and 11 March 2019, Ms Hughes said “Don't worry about the bills. I am assuming you won't pay and we will make an application”. The Claimant then said by email to the Defendant on 11 March 2019 that: “I would love to pay but I can't afford it. At the moment all I have is my monthly allowance which I need to live off”. The final response from Ms Hughes on 11 March 2019 was “You don't understand! I do not want you to pay. Please don't. I do have to bill you each month.”
An email from Mr Fennelly to the Claimant on 10 February 2020 said “Piet is paying your legal fees and we will say he should pay these costs. If Piet says no the judge will decide what should happen.” An email sent by Ms Hughes to the Claimant on the same day said “Calm down! Who says you are paying?”
In an email of 15 April 2020 to Ms Hughes the Claimant queried whether Ms Hughes believed that Mr Pulford had adequate finances to pursue and in relation to the fees paid by her, whether there was “‘a wash’ it can come out of in the end?” Ms Hughes' response to that was that “Of course there is money”.
Even as late as 8 October 2020, the Claimant was still questioning whether the payments made by her would “come out in the wash”. It was not until 16 November 2020, just before the FDR, that the Defendant communicated that neither party would be reimbursed its legal costs. On 19 November 2020 the Claimant outlined that she still wanted Mr Pulford to reimburse the fees paid.
The Claimant maintains that it was, from the outset, her understanding, based upon consistent representations made to her by the Defendant, that the Defendant's fees would be paid by Mr Pulford and accordingly she had little (if any) interest in the fees being incurred. A substantial portion of these invoices (totalling £42,621) were paid by Mr Pulford. Although the invoices during this period were also sent to the Claimant via email only, she did not take any notice of them.
In the circumstances, says the Claimant, the Defendant cannot say that its fees were knowingly authorised by the Claimant, as required by the Defendant's terms and conditions of business, and the Court should consider the reasonableness generally of all costs, in particular counsel's fees, on that basis.
In the alternative, if the Court finds that the Claimant was...
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