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.
Readers' comments (6)
z. ahmed | 2-May-2012 5:38 pm
Lawyers have an obligation like garages or any other sector to keep clients informed of the running tab. Clients should also be told of any pitfalls foreseen that could lead to higher charges.
Unforeseen pitfalls create new issues that add cost which is up to the client to decide how far to go. Lawyers also have an obligation to properly advise clients of the likely outcomes on the extra expenditure and whether one course of action is better than another or whether to do nothing. In the end it is for the so called professionals to weigh things up and advise accordingly, being mindful that clients do not have an endless pot always. The legal charges being banded about are absolutely absurd and one wonders if the profession live in the real world. No wonder Jackson is waving a stick, Courts also have a duty to paying clients disgruntled by the extorionate charges some Lawyers try to get away with. I say it is a good idea for stage payments, interim bills and a running commentary of where clients are heading. There should be a protocol set up and part of the conditional fee arrangement which is clear.
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Anonymous | 2-May-2012 7:36 pm
What is a dispute over £5k of costs doing going to the Court of Appeal? Presumably he found the money later.
What a waste of time and effort
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nick | 3-May-2012 8:37 am
amazing that this sort of thing has to go to the court of appeal. The real story on this is surely how a claim where there is a difference of opinion of no more than £2500 can make it through two trials.
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Dayglo Dave | 3-May-2012 9:15 am
z.ahmed - May I ask how you feel you are in a position to judge the charges to be "absolutely absurd"? How much do you know about the costs of running a practice? How much do you feel an occupation and non-molestation order should cost? How much experience do you have of this area of work?
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Anonymous | 3-May-2012 9:31 am
One suspects that z. ahmed has an axe to grind against the legal profession, although he/she is absolutely right to state that clients should be advised of work in progress on a regular basis once original estimates are exceeded.
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Anonymous | 3-May-2012 1:34 pm
I, for one, am grateful that CKFT have stuck to their guns on this and seen the case through to the Court of Appeal. The judgment is very sensible and the lawyer involved at CKFT did as much as he could by the book. Lawyers cannot be expected to work for clients for free, or incur disbursements without having the cash, simply because an estimate is exceeded. Clients need to be better educated in that litigation, particularly commercial litigation, is a rich man's game (unless CFAs are in play, but even then disbursements can be huge).
The other thing about litigation is that it is extremely unpredictable. By its very nature it is adversarial and litigators and clients involved in litigation are very innovative in their strategies, as well as being adept at exploiting weaknesses. Anything that can happen in litigation, often will happen. Even a very good litigator has not seen it all before, and cannot anticipate the twists and turns that a piece of litigation will take. But if a client wants to pay a litigator £300 p/h to sit around and try to think of everything, then that's their prerogative - as long as they're willing to pay.
Oh, and BTW, the Jackson recommendations as regards CFAs in non-PI / RTA cases are nonsense. Access to justice needs to be protected for the little guys because, as I said above, litigation is otherwise solely a rich man's game.
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