Firms not obliged to work for non-paying clients, CoA rules

Lawyers are not under any obligation to continue acting for clients who refuse to settle their legal bills, the Court of Appeal (CoA) has ruled.

Overturning the first-instance judgment in Cawdery Kaye Fireman & Taylor (CKFT) v Gary Minkin, the CoA said the firm was entitled to suspend working for Minkin as he had failed to pay his legal bills.

The appeal came after Mr Justice Cranston dismissed a bid by the firm to overturn a costs judge’s ruling that Minkin should not be held liable for outstanding fees (see judgment). Cranston J said the terms of CKFT’s retainer letter should have been clearer and the firm should have told its client that the original costs estimate for the work could be exceeded.

The CoA, however, said that the firm was entitled to suspend working for Minkin.

Giving the lead judgment Lord Justice Ward stated: “The client had no reasonable justification for not meeting the bill presented to him. Consequently the solicitors were entitled to and in my judgment did suspend the operation of the retainer pending receipt of monies on account of costs, both those incurred and those to be incurred.”

Minkin instructed CKFT to advise and represent him in relation to an occupation and non-molestation order obtained without notice by his wife, from whom he had separated.

The firm originally estimated costs of £3,000, but the bill reached £5,462 because additional costs arose when it was discovered that his wife had unexpectedly rented out the matrimonial home.

Minkin complained that this bill was unexpectedly and unreasonably high, that CKFT was not obtaining tangible results and that anyway the firm should recover its costs from the other side in the litigation.

At the original hearing, costs master O’Hare said the  solicitors’ retainer to conduct litigation is an entire contract. He ruled that CKFT had terminated the retainer by refusing to work further. Therefore CKFT was not entitled to any payment and its bills were assessed at nil.

However, the CoA said: “Mr Minkin could not reasonably expect his solicitors to wait for payment until they had an order for costs made against Mrs Minkin. That’s not the way the world works and Mr Minkin was well aware of that fact. 

“The reality in this case is that, as his emails reveal, Mr Minkin was short of money and couldn’t readily pay for his solicitors’ services in coping with a new and unexpected turn of events.  The comparatively simple case had become more complicated and as a result more expensive. The unexpected complication doesn’t justify a refusal to pay a bill which became payable on presentation.”

The firm instructed Hailsham Chambers’ Bernard Livesey QC to lead its appeal while 4 New Square’s Nicholas Bacon QC was instructed by Routh Clarke Solicitors for the respondent.