Beachcroft Wansbroughs has returned around £125,000 to a former client, Islington & Shoreditch Housing Association (ISHA), after its costs estimate rose nearly six times above the level it had originally projected
The judge who imposed the order against Beachcrofts said that "time and time again" English courts were dealing with law firms' failures to comply with statutory requir-ements for them to update clients about their rising costs.
Beachcrofts failed to comply with Rule 15 of the Solicitors' Practice Rules, which covers providing a client with costs advice, and also breached the Solicitors' Costs Information and Client Care Code.
Following a costs hearing at the High Court, the costs judge Master Wright said: "There was nothing said about what the costs were going to be and there was no assistance given to the client at all."
The firm's original costs comprised a capped fee totalling £46,695, which was later reduced, plus VAT and disbursements, and a further £22,000 plus extras for additional items. This in-creased to a total final bill of £265,778, a large portion of which had already been paid to Beachcrofts.
Following the hearing, Beachcrofts agreed to repay ISHA £99,875. This related to work carried out by the firm between November 2000 and July 2001, at which point Beachcrofts was replaced by Bolt Burdon. Beachcrofts also has to pay £24,700 in costs relating to the assessment proceedings.
Wright said Beachcrofts "didn't give the client an indication as to what future costs were likely to be". As a result, the firm breached the statutory requirement for solicitors to keep clients informed in writing about rising costs.
Wright went on to say that Beachcrofts' "apparent failure" to follow Rule 15, part of subordinate legislation, constituted a special circumstance, and thus the firm, based on the findings in an earlier case, could be subject to taxation.
"It's not really a point of practice and procedure, it's a point of general principal and importance in the development of the substantive law," Wright concluded. Paul Murray, litigation managing partner at Beachcrofts, said: "The work involved was complex and the client expressed appreciation of the service provided.
"The dispute arose from a capped fee agreement. The work involved and the fees exceeded everybody's expectations. We maintain that the agreement had been amended to cover the full cost of the service provided. The client disagreed. Happily, the dispute with the client has now been resolved by agreement."
Graham Balchin, head of professional negligence at Bolt Burdon, acted for ISHA.