Oakwood Solicitors Ltd v Menzies

Appellant

Roger Mallalieu KC

Gemma McGungle

(Instructed by JG Solicitors Ltd)

Respondent

Craig Ralph

Erica Bedford

(Instructed by Oakwood Solicitors Ltd)

Lord Hamblen (with whom Lord Briggs, Lord Sales, Lord Leggatt and Lord Richards agree):

Introduction

1. The court has long had powers to ensure that solicitors do not claim excessive remuneration for work done by them.  These powers are exercised through the court's taxation or, in modern parlance, assessment of solicitors' bills of costs.  An assessment involves the court determining whether the costs are reasonably incurred and are reasonable in amount.
2. The right to apply to the court for assessment of a solicitor's bill of costs is governed by section 70 of the Solicitors Act 1974 (the "1974 Act").  In summary, the statutory scheme is as follows.  For one month after its delivery there is an unconditional right to have the bill assessed and, if this right is exercised, no action can be commenced on the bill until that assessment has been completed.  After that one month period, there is a right, until 12 months have passed from delivery of the bill, to apply to the court for an assessment, which it may order on such terms as it thinks fit.  After 12 months have passed, no order for assessment shall be made unless there are "special circumstances".
3. A different regime applies, however, if there has been "payment" of the bill.  In those circumstances, if an assessment is sought after the initial one month period but before the expiry of 12 months from payment of the bill, no order for assessment shall be made unless there are "special circumstances".  After 12 months have expired from payment, no assessment can be made (section 70(4) of the 1974 Act). 
4. The issue which arises on this appeal is what constitutes "payment" for these purposes. 
5. The appellant contends that, as Bourne J held, it requires that the client should have been informed of and have provided agreement to the specific amount in respect of which payment is to be made pursuant to the bill.
6. The respondent contends that, as the Court of Appeal held, all that is required is an agreement with the client that fees may be deducted from monies held to the client's account and delivery to the client of a bill setting out the amount of those fees.  No further agreement is required.

Factual background

7.  On 29 November 2015, the appellant (the "Client") was involved in a road traffic accident as a result of which he suffered serious injuries. The respondents (the "Solicitors") were instructed to pursue a claim for damages for personal injury in relation to the accident. The agreed terms of their retainer were set out in a conditional fee agreement dated 17 December 2015 ("the CFA").
8. Under the CFA, in the event that the claim succeeded the Client agreed to pay the Solicitors' basic charges, disbursements and a success fee set at 25% of basic charges.  It was also agreed that the total amount of those…