Solicitor was “author of own misfortune” in failed costs claims

Call: Solicitor failed to produce an attendance note

A solicitor was the “author of his own misfortune” by failing to document what he said was a client’s agreement to pay a higher fee for a more experienced barrister, a costs judge has ruled.

Master Haworth disallowed any additional costs incurred by London firm Richard Slade and Company in relation to the instruction of counsel over and above the fixed fee reached with its client, James Murray (called the first claimant in the ruling).

He also disallowed the firm’s claim for costs on another case for Mr Murray on the basis that it terminated the conditional fee agreement (CFA) between them without good reason.

The master was ruling on two preliminary issues. The first concerned the firm’s work for Mr Murray in defending a claim, for which he and the eponymous Mr Slade agreed a fixed fee of £50,000.

Mr Murray was unhappy with the performance of his barrister at the pre-trial review and told Mr Slade that “you had better get this sorted out”.

Mr Slade instructed new counsel and said he called Mr Murray a week later to tell him that it would cost a further £15,000 plus VAT. The client denied this and that he agreed to pay the additional fee.

The judge said he was satisfied that a call took place but not with Mr Slade’s record of it in his witness statement.

“As an experienced litigator I would have expected there to have been an attendance note in relation to this telephone call which was of the utmost importance, varying as it purported to do, the terms of the fixed-fee agreement.”

There was also no confirmatory letter or email, “which I would have expected to see, bearing in mind the previous difficulties in the relationship” between the pair in these and other proceedings.

Mr Slade agreed with the first barrister a brief fee of £10,000 plus £2,000 refreshers and budgeted it for £16,000. The fee for the second barrister was a flat £25,000 including refreshers.

He accepted in cross-examination that he did not advise Mr Murray that the additional costs over and above those previously agreed may not be recovered from his opponents, were they ordered to pay costs.

Master Haworth said: “In my judgment Mr Slade was the author of his own misfortune (1) by failing to record his attendance on the first claimant on 17 May 2018 and (2) failing to confirm his instructions from the first claimant to obtain different counsel at an increased fee of £25,000 plus VAT, together with the consequential effect this would have on the fixed-fee agreement.

“There is simply no documentary evidence to support Mr Slade’s contention that the first claimant was made aware of the change of counsel, his name or the additional fee that was being incurred on his behalf.”

As a result, Mr Slade had not complied with rule 46.9(3) and so the additional counsel’s fee was irrecoverable from the first claimant and any additional costs thereby incurred over and above to the fixed-fee agreement were disallowed.

The CFA related to a claim Mr Murray was making against his former solicitors, Hodders. Mr Slade said the retainer was terminated by the client requesting the return of his papers.

Mr Murray accepted that a request for the papers “may have been made”, but said it was borne out of frustration about lack of progress rather than with a view to termination.

Paragraph 14 of the CFA provided that Mr Murray could end the CFA at any time, while the firm could terminate if Mr Murray did not meet his responsibilities.

Master Haworth found that Richard Slade had conflated the two cases.

“In my judgment there was no basis whatsoever for the defendant to terminate the CFA on the ground of any failure to pay costs. Any sums owed could only relate to the counsel’s fee claim and could not relate to the Hodders case.

“The defendant had not given the first claimant notice of any breach of his responsibilities under the provisions of paragraph 14.3 of the CFA in any event.”

The judge also ruled that Mr Murray did not terminate the retainer by seeking the return of his file. He had made a complaint and asked that the file was released on the basis that outstanding disbursements were dropped.

“At no time did the defendant advise the first claimant that the request he made in his email… would cause the retainer to be terminated or advise him of the consequences of termination,” the judge said.

“Furthermore, the defendants accepted in [later] correspondence that the retainer continued. They then terminated the retainer at some unknown date for an alleged repudiatory breach without setting out the terms of that breach or providing the first claimant with notice.”

He disallowed the Hodders claim for costs on the basis that the CFA was terminated by the solicitors without good cause or on reasonable notice.

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