Carter-Ruck & Partners v Holmes & Anor

A solicitor’s entitlement to contractual remuneration is ordinarily not dependent on the benefit or result achieved for the client. Where there is no conditional fee arrangement, and the charging rates were notified and agreed, the relevant questions are whether the work fell within the retainer and instructions, was performed to the proper professional standard, and was reasonably charged.

The proportionality requirement in Part 1 of the Civil Procedure Rules 1998 concerns the conduct of proceedings and the court’s assessment of litigation costs. It does not govern the underlying contractual claim for solicitor-and-client fees.

Solicitors claimed £2,115 in unpaid fees from their former clients under a retainer. The District Judge dismissed the claim, principally because the solicitors should have withdrawn once the clients’ dissatisfaction and the remote prospects of progress became clear.

On appeal, the County Court judge held that the District Judge had erred in treating proportionality between costs and achievement as relevant to the contractual claim, and in failing to apply the applicable rule concerning termination of a retainer. He allowed the claim and assessed the charges as reasonable. The clients appealed to the Court of Appeal, challenging the treatment of proportionality, the decision to determine the claim itself, and the judge’s treatment of the factual material.

1. Appeal dismissed. The Court of Appeal upheld judgment for the solicitors in the sum of £2,115, with costs on the standard basis subject to detailed assessment.
2. The solicitor’s entitlement to payment was not dependent on what had been achieved for the clients. In an ordinary retainer without a conditional fee arrangement, where the charging rates had been notified and agreed, the relevant considerations were whether the work was within the retainer and instructions, whether it was properly carried out to the standard of reasonably competent and skilled solicitors holding themselves out as defamation specialists, and whether the fees were reasonable.
3. The District Judge had therefore erred in law by treating the proportionality of the costs to what had been achieved as relevant to the contractual claim. The Civil Procedure Rules 1998 and their overriding objective governed the conduct of court proceedings and the assessment of costs incurred in those proceedings. They did not govern a contractual claim for solicitor-and-client fees. Proportionality was relevant when the County Court judge summarily assessed the costs of the appeals, but not when determining the solicitors’ contractual entitlement.
4. The County Court judge was entitled to determine the reasonableness of the charges himself after finding an error of law. Both parties had agreed that he could decide the matter on the material before the District Judge. The correspondence, attendance notes and evidence already available enabled him to decide the issue fairly. Referring the small claim back would have caused further disproportionate costs and delay.
5. The challenge based on departure from factual findings failed. The District Judge had not made a specific finding inconsistent with the County Court judge’s assessment of the later solicitor’s work.

• Basildon County Court: The District Judge dismissed the solicitors’ claim and the clients’ counterclaim. His Honour Judge Worsley allowed the solicitors’ appeal, entered judgment for £2,115 and summarily assessed costs.
• Court of Appeal (Civil Division): The clients’ appeal was dismissed with costs on the standard basis subject to detailed assessment.