Analysis
This appeal concerned the one-fifths rule contained in s70 of the Solicitors Act 1974. That rule provides that if a solicitor’s costs bill is reduced by more than one-fifth at detailed assessment, the costs of that assessment will be borne by that solicitor. If there are special circumstances, the rule may be disapplied under s70 (10) of the Act.
The original action was a claim issued in the Central London County Court by a mother against her daughter, Miss Bentine, for the court to determine their respective equitable interests in certain property. Miss Bentine was initially instructed by Wilsons LLP, but upon losing litigation capacity midway through proceedings, she acted by her litigation friend, the Official Solicitor. The claim settled and HHJ Dight ordered a detailed assessment of Miss Bentine’s costs. This came on before Master O’Hare. Wilsons’ invoices after the point at which Miss Bentine lost capacity were disallowed for want of retainer (invoices 3 and 6), as were invoices which claimed the costs of work done by Wilsons in negotiating these costs, and the work involved in applying to the Costs Office (invoice 9).
On the issue of the costs of detailed assessment, Wilsons, relying upon the decision of the Court of Appeal in Re Taxation of Costs; Re A solicitor [1936] 1 KB 523 (Re A solicitor), contended before the costs judge that the costs disallowed for want of retainer should have been deducted before the one-fifth calculation was made, and should not therefore form part of the assessment. This argument was rejected – the costs judge holding that those costs were to be included within the assessment. The costs judge then considered whether there were special circumstances in accordance with s70 (10) of the 1974 Act. He held that the rule should be disapplied, and allowed Miss Bentine just 60% of her costs of the assessment on the basis of special circumstances prevailing against her, namely the ‘tortuous and expensive course’ taken by her legal team on assessment.
On appeal to the High Court, Wilsons contended that Re A solicitor was a binding precedent, and that the costs judge was not entitled to depart from it. The respondents made five submissions in support of the contention that Re A solicitor was not binding upon the court costs judge:
- (1) that Re A solicitor did not apply to the present situation because the costs judge’s jurisdiction was in equity rather than law; or
- (2) that Re A solicitor only applied where the client himself had raised the issue of want of retainer and not where the issue arises through want of capacity or where it is the taxing officer who has raised the issue;
- (3) that invoice 9 was not disallowed for want of retainer and that Re A solicitor was therefore distinguished;
- (4) that Re A solicitor was decided per incuriam; and
- (5) that Re A solicitor was disapplied by the amendments to the wording of s70(9) of the 1974 Act made by the 2007 Act.
Held (dismissing the appeal)
Re A solicitor was binding on the costs judge, and accordingly, the invoices disallowed for want of retainer were correctly discounted for the purposes of the one-fifth rule:
- (1) None of the cases cited in support of the first contention were authority for the proposition that Re A solicitor should not apply on account of the different jurisdiction of the costs judge. They said nothing more than that bills incurred where there is want of retainer do not form part of the taxation under the statute.
- (2) That it made no difference whether want of retainer is raised by the client or by the official solicitor, or by the costs judge.
- (3) The costs in invoice 9 were disallowed for want of retainer, and that even if they were not, the same principle should apply to the costs of all actions which are adverse to a client rather than actions performed for the client’s benefit.
- (4) That the court was not prepared to hold that Re A solicitor was decided per incuriam.
- (5) That the 2007 Act was neither intended to, nor did in fact, make the kind of radical changes to the 1974 Act that were alleged. While Wilsons succeeded on the applicability of the rule in Re A solicitor, the court went on to hold that the imposition of improper charges constituted special circumstances in accordance with s70(10) of the Act. It therefore departed from the one-fifths rule, ordered Wilsons to pay the costs of the detailed assessment, and dismissed the appeal.
Continue reading "Bentine v Bentine [2013] EWHC 3098 (Ch)"