Jemma Trust Company Ltd v Liptrott & Ors

A solicitor administering an estate may, absent agreement, calculate remuneration by time, by value, or by both methods. A separate percentage charge for value remains permissible even where an hourly rate is also charged. The overall remuneration must be fair and reasonable under the Solicitors’ (Non-Contentious Business) Remuneration Order 1994, with no double counting. Value will usually call for a regressive scale in high-value estates, using broad bands as guidance rather than rigid rules. If value is not separately charged, the hourly rate must nevertheless make sufficient allowance for it. The costs judge must review the final charge in the round.

Executors instructed solicitors to administer a substantial estate without an express fee agreement. The solicitors rendered bills based both on time and on percentages of estate value. On a preliminary issue, Costs Judge Rogers held that a separate value charge could not be made alongside time charges, although he accepted the hourly rates. The trustee of an assigned residuary interest supported that conclusion; the solicitors appealed, with the Law Society intervening. The Court of Appeal considered whether value could be charged separately, how any value element should be scaled, and whether the hourly rates sufficiently reflected value.

Lord Justice Longmore, giving the judgment of himself and Peter Gibson LJ, allowed the appeal. The matter was remitted to Costs Judge Rogers for final assessment.

1. Under paragraph 3 of the Solicitors’ (Non-Contentious Business) Remuneration Order 1994, the controlling question is whether the total remuneration is fair and reasonable to both solicitor and entitled person, having regard to all the circumstances and the listed factors, including the amount or value of the property involved.
2. The Court rejected the proposition that modern time recording had removed any scope for a separate value charge. A solicitor may charge by time, by value, or by a combination of both. The bill must make the treatment of value transparent, and value must not be taken into account more than once.
3. In estate administration, the value element will usually be calculated on a regressive scale. The bands and percentages suggested by Maltby v D J Freeman [1978] 1 WLR 431 and adapted for inflation were guidelines only. The final figure must be tested in the round against the fair-and-reasonable standard.
4. The costs judge’s approval of hourly rates involving only a modest uplift over basic expense rates did not sufficiently allow for the estate’s value once the separate value charges were excluded. The assessment therefore required reconsideration.

Lord Justice Mance agreed with the result. He accepted that the 1994 Order and established practice permitted hourly, value-based, or dual calculations, while observing that dual charging offered limited certainty and that the ultimate safeguard remained the fair-and-reasonable assessment.

• Court of Appeal (Civil Division) allowed the solicitors’ appeal and remitted the assessment to Costs Judge Rogers.
• Supreme Court Costs Office Costs Judge Rogers decided the preliminary issue by rejecting a separate value charge alongside time-based charges, while upholding the hourly rates.