Kerry Underwood

LEGAL FEES SETTLEMENT WAS NOT A CONTENTIOUS BUSINESS AGREEMENT

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Whitaker v Richard Slade & Company Plc [2018] EWHC B17 (Costs)

a High Court Master held that an agreement in relation to a specific sum for work done was not a Contentious Business Agreement and, if anything, was of benefit to the claimant client rather than the solicitors.

The former client issued proceedings, seeking a detailed assessment of £166,671.29.

The sum owed was in respect of fees for legal services to 31 December 2016, pursuant to a retainer entered into in 2014, which provided for hourly rates and monthly billing.

In March 2017 the parties entered into a Deed of Arrangement in which the client agreed to pay the sum of £86,000 for all the legal costs incurred.

That agreement related to sums due from the claimant to the defendant for work done up to the date of the agreement.

The claimant had been encouraged to obtain independent legal advice in relation that agreement.

The Master held that the agreement was not a Contentious Business Agreement.

The claimant had contended that the Agreement was an agreement to make interim payments and that the sums remained subject to assessment and in the alternative that it must be a Contentious Business Agreement within the meaning of section 59 of the Solicitors Act 1974, and should be set aside as being unfair and unreasonable.

Its natural meaning was that it provided for payment of a fixed sum for legal services to the end of 2016 without further assessment.

The right to assessment under section 70 of the Solicitors Act 1974 stems from service of the bill of costs and a characteristic of a business agreement, whether contentious or non-contentious, under the Act is that there is no right of assessment, so the sums due can be recovered as an ordinary debt, unless the agreement is set aside.

The Master rejected the client’s claim that if the Agreement was not treated as a request for payment on account it must be a Contentious Business Agreement.

It does not follow that if an agreement does not preserve the right to assessment, it must be a Contentious Business Agreement.

Some agreements between solicitors and clients are outside of the scope of section 59.

The Master said that if he was wrong, and the agreement was a Contentious Business Agreement, then it was fair and reasonable and should not be set aside.

The bill clearly identified the work done and who it was done by.

The client was an experienced businessman and a sophisticated client who had taken independent legal advice and knew that the compromise would preclude assessment.

The hourly rates were well below ordinary commercial rates for the type of work and the discount involving a substantial write-off of the costs and was favourable to the client and setting it aside would result in unfairness to the solicitor.  

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Written by kerryunderwood

February 15, 2019 at 6:50 am

Posted in Uncategorized

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