Solicitor – Retainer to issue and conduct proceedings – Respondent client insisting on advancing claim on grounds that appellant solicitor and counsel considering unarguable – Appellant terminating retainer and issuing final bill – Assessment of fees – R 12.12 of Solicitors’ Practice Rules 1990 – Whether fees should be disallowed – Whether solicitor entitled to terminate retainer – Appeal allowed
In June 2005, the respondent retained the appellant firm of solicitors to advise on and prosecute proceedings, under section 288 of the Town and Country Planning Act 1990, to quash a planning inspector’s decision confirming a grant of planning permission. Specialist counsel advised that there was no reasonable prospect of a successful challenge on a point of law but the respondent instructed the appellant to issue proceedings. The claim form included four grounds that the respondent wanted to advance.
Thereafter, new counsel was instructed. He drafted a skeleton argument that included only the first ground, relating to the misapplication of a planning policy, as being the sole ground that was properly arguable. The respondent objected and demanded that the other three matters be included. In correspondence, the appellant and counsel maintained their position that only the first ground was arguable, while the respondent insisted on all four being advanced. In February 2006, the appellant terminated its retainer and applied to be taken off the record. Meanwhile, the respondent had lodged with the court a skeleton argument of his own. He represented himself at a hearing at which his application for an adjournment was refused and his claim was dismissed.
The appellant submitted a final fee account in the sum of £6,605.41. The respondent sought an assessment by a costs judge, arguing that the fees should be disallowed since the appellant had wrongfully terminated its retainer. A master accepted that contention and held that the appellant was entitled to no costs other than those for disbursements. Upholding that decision, a judge held that the appellant’s retainer was an entire contract, which could not be terminated solely because the respondent chose to advance his claim on a basis that the appellant believed would fail, provided that such a course involved no impropriety on the part of the appellant or counsel. He rejected the appellant’s claim that it had been instructed to advance an improper case and was therefore entitled to cease acting by reason of r 12.12 of the Solicitors’ Practice Rules 1990. The appellant appealed.
Held: The appeal was allowed.
(1) The appellant’s retainer was an entire contract, under which it had been retained to institute and take the statutory challenge to its conclusion. However, that did not prevent it from terminating the retainer before the end on reasonable notice if it had a reasonable ground for refusing to act further for the client: Underwood Son & Piper v Lewis [1894 2 QB 306 applied. Although the circumstances in which a solicitor could terminate a retainer, if such had been agreed, would be governed by the contract, in the instant case, the contract reflected the position at common law and under r 12.12 of the 1990 Rules, namely that the solicitor could terminate only with good reason. The phrase “good reason” should not be interpreted narrowly so as to permit a solicitor to terminate its retainer only where it was instructed to do something improper. Although the 1990 Rules did not spell it out expressly, unlike the 2007 Code of Conduct that superseded them, solicitors would have understood that, as officers of the court, they were under a professional duty not to include in the court documents they had drafted any contention that they did not consider to be properly arguable and not to instruct counsel to advance such contentions. That obligation corresponded to the duty of counsel under the Bar Code of Conduct. It was reinforced by the parties’ duty under CPR 1.3, which extended to their legal advisers, including advocates, to help the court to further the overriding objective of dealing with cases justly. The overriding objective was not furthered by advancing hopeless arguments: Skjevesland v Geveran Trading Co Ltd (No 2) [2002] EWCA Civ 1567; [2003] 1 WLR 912 applied.
The appellant had been entitled to terminate its retainer. The contentions that both the appellant and counsel were unwilling to advance were those that they considered to be not properly arguable, incapable of proper articulation as legal arguments and hopeless. They were correct in that view. The challenges on the planning merits that the respondent insisted on making could not, as a matter of law, be made under section 288 of the 1990 Act, which permitted only a challenge for legal error. It would be improper in a section 288 claim to advance an argument based on the merits of the planning inspector’s decision, and if the respondent insisted on such an argument being advanced the appellant had good reason for terminating the retainer.
(2) The appellant had been entitled to its proper costs and disbursements for work carried out prior to the termination of its retainer. Where a solicitor terminated an entire contract before completion for good cause or on reasonable grounds, it was entitled, subject to any relevant provision of the agreement with the client, to be paid for the work that it had undertaken prior to the termination: Vansandau v Browne (1832) 9 Bing 402 and Underwood applied.
Richard Buxton appeared for the appellant; the respondent appeared in person; Richard Drabble QC and David Holland (instructed by Mills & Reeve LLP, of Birmingham) appeared for the Law Society, as intervener.
Sally Dobson, barrister