Possession action — Respondent agreeing with solicitor to act — Costs assessed at higher figure — Respondent refusing to pay outstanding bill — Appellant refusing to continue to act until bill paid — Whether appellant’s actions disentitling it from recovering more costs than already paid — Appeal allowed in part
The respondent had instructed the appellant solicitor to act on her behalf after she was served with a possession notice and subsequent court order in respect of her flat. A dispute arose over the amount charged by the appellant for its services.
The appellant argued that it had given an original estimate of £1,500, but that a revised estimate was subsequently sent to the respondent that stated that the costs were around £3,710. The appellant had also enclosed a copy of its terms and conditions, which the respondent had signed and returned. A final bill for £4,636.84 was sent. The respondent was concerned about the rising costs and paid only the £1,500 that had originally been agreed.
The possession action was subsequently discontinued because of errors in the court order, but the landlord indicated that it would start a fresh action. The appellant informed the respondent that the issue of the outstanding balance of its costs would have to be resolved before it would accept service of those proceedings.
The respondent complained about the demand for fees in excess of the agreed estimate and requested a detailed assessment of the bill. The master ruled that because the appellant had refused to act until it had been paid, the retainer had been improperly terminated. He held that the appellant was in breach of its contract and was not entitled to anything more than it had already received.
The appellant appealed, contending that the master had wrongly concluded that a breach had led to termination when, in fact, there was either a final bill, a defective interim bill or a request for payment on account, all of which entitled it to some payment. The respondent argued that where a solicitor refused to represent its client for failing to pay the moneys requested, the retainer would be determined if the demand was unreasonable, and the solicitor would not be entitled to recover any costs.
Held: The appeal was allowed in part.
The request for payment was not a final bill and was consistent with an interim statute bill rather than a request for payment on account: see the Law Society’s Practice Advice on Interim Bills, October 2001.
Although a solicitor was unable to recover fees in litigation conducted under an agreement that was entirely illegal, there was no authority for the proposition that a solicitor that overcharged a client by, for example, 21%, and then insisted upon payment, had automatically terminated its retainer and could not recover any part of the costs incurred. Such a breach of contract would not render the entire contract illegal: Wild v Simpson [1919] 2 KB 544 distinguished.
In the present case, even if the appellant’s insistence upon full payment before continuing to act amounted to a breach of contract, it did not disentitle the appellant to its costs for work properly carried out, apart from any costs referable to the second possession action for which it had refused service. Moreover, there was no reason why that figure should be restricted to the sum already paid when the respondent had signed the appellant’s terms and conditions after she had received the higher, revised estimate of costs.
Stephen Cottrell (instructed by William Sturges & Co) appeared for the appellant; the respondent appeared in person.
Eileen O’Grady, barrister
