A case which clarifies the ‘special circumstance’ required for a Judge to go beyond the usual cost consequence of a solicitor/client detailed assessment
Fee paying clients have the statutory right to request the detailed assessment of their solicitor’s costs once they have been served with a bill.
Under Section 70(9) of the Solicitors Act 1974, the usual cost consequences when a Bill of Costs is assessed at four fifths of the claimed amount or above, are that the client shall pay the costs of the assessment.
In this matter, following service of the bill of costs the Claimant agreed the bill in full, however as a result of the specific circumstance and the firm’s conduct, the firm was ordered to pay the client’s costs of the detailed assessment process.
Section 70 Solicitors Act 1974
(a)the order for assessment was made on the application of the solicitor and the party chargeable does not attend the assessment , or
(b)the order for assessment or an order under subsection (10) otherwise provides,
the costs of an assessment shall be paid according to the event of the assessment , that is to say, if the amount of the bill is reduced by one fifth, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs.
(10)The costs officer may certify to the court any special circumstances relating to a bill or to the assessment of a bill, and the court may make such order as respects the costs of the assessment as it may think fit.
In Parissis v Matthias, the client had instructed the law firm to act on his behalf in relation to proceedings, details of which are not relevant for our purposes. The outcome of the proceedings was the client being served with the firm’s bill for a gross sum of £12,600.00. The bill notified the client of their entitlement to have the bill reviewed as per sections 71 and 72 of the Solicitors Act 1974.
The bill was ‘global’ in the most literal sense of the word, providing no breakdown of the hourly rates or time which made up the bill. As such the client requested that a breakdown of the bill be provided. The firm failed to provide a breakdown and as such, with the time limits contained in Section 70 in mind, the client commenced proceedings. The bill was ordered to be subject to detailed assessment and the firm were ordered to provide a breakdown of the costs, which they did (albeit on the last possible day as per the Order).
Upon receipt of the breakdown the client confirmed their agreement to pay the costs as claimed within the bill, in addition to interest thereon. The matter went before Master Rowley who determined that the client was to pay the costs of the detailed assessment as the bill had not been reduced by one fifth and the client had not evidenced the ‘special circumstance’ required by Section 70(10) in order to justify any costs Order outside of the norm.
The decision was appealed to the High Court where the case went before Justice Morris.
Justice Morris starts by highlighting that detailed assessment proceedings via Section 70 were the incorrect proceedings. The Claimant had a right under Section 64 of the bill to require the firm provide a detailed bill however this was not the approach taken. The claim having started off on the wrong foot:
“the question is whether the appellant (the client) should bear the costs consequences of this wrong path having been taken.”
Justice Morris, overturning the earlier first instance decision determined that the firm should bear the cost consequences for a number of reasons:
- Prior to commencing the (incorrect) proceedings, a breakdown of the global bill was sought by the client, but not provided by the firm. The action of the client in agreeing to pay the bill in full once a breakdown was received shows that had the breakdown been provided at an earlier stage, proceedings could have been avoided altogether.
- By requesting a detailed assessment of the bill the client was not tacitly consenting that they had been provided with a sufficient breakdown of the costs (as argued by the firm and accepted by the first instance judge).
- At the time of commencing proceedings the client, not being a solicitor, was unaware of the provisions of Section 64 and the rights contained therein. The client had been drawn to Part 70 proceedings via the notice on the firm’s ‘global’ bill.
These reasons combined were deemed by Justice Morris to sufficiently establish the ‘special circumstances’ required in order to justify an order for costs outside of the normal Section 70(9) costs:
“special circumstances” do not have to be “exceptional”; rather, just something out of the ordinary course justifying a departure.”
The decision has come about as a result of fairly unusual circumstance, and had the firm in question acted more diligently the proceedings would have been avoided altogether. However, there are a few lessons to take from the case.
Firstly, while a litigant in person is normally to be taken as any other party to proceedings, here is a clear example of different treatment by the court. Justice Morris allows for the client’s ignorance of Section 64 and as such the client was not sanctioned for failing to follow that more appropriate path.
Secondly, the case highlights the importance of properly informing lay clients of their statutory rights. Had the notice on the firm’s global bill alerted the client to Section 64 it would have likely avoided the need for the litigation altogether. If the proceedings had still commenced the firm’s case would have been significantly strengthened had more complete notice been provided.
Finally, when all is said and done, if the firm had simply provided a breakdown of their bill when asked by the client the entire issue would almost certainly have been avoided…