Russell Young & Co v Brown & Ors

A conditional fee agreement which defines basic charges broadly enough to include a proper share of work done for several clients permits recovery of that share from the paying party. Generic or common costs are not a distinct category requiring a separate collateral agreement or proof of express informed consent. They remain subject to detailed assessment on the standard basis. The court must assess whether they were proportionately and reasonably incurred and proportionate and reasonable in amount, with doubt resolved in favour of the paying party. Client-care explanations, records and clear arrangements between firms are good practice and assist proof, but are not preconditions to recovery.

Six miners brought professional negligence claims against their former solicitors, Russell Young & Co, alleging that their vibration white finger claims had been settled at undervalue. Their new solicitors, Burroughs Day, acted under conditional fee agreements and incurred work intended to benefit several clients collectively, including advice on liability and preparation for possible group litigation.

Master Wright held that no generic costs were recoverable because the agreements did not include a specific collateral agreement making each client liable for a share. Senior Costs Judge Hurst reversed that decision, holding that the wording of the agreements was wide enough to cover generic costs. Russell Young & Co appealed on the issue whether the agreements, standing alone, were sufficient.

Lady Justice Smith delivered the judgment of the court. Lord Justice Wilson and Lord Justice Buxton agreed. The appeal was unanimously dismissed.

1. The only issue was whether the conditional fee agreements, without any additional agreement specifically addressing generic costs, provided a valid basis for recovering from the paying party a share of costs incurred for the benefit of a group of clients. It was common ground that the wording of the agreements was wide enough to encompass such costs and that the Conditional Fees Regulations 2000 had been satisfied.
2. A client is liable under the agreement for costs properly incurred on his behalf. That liability extends to costs incurred for the benefit of several clients, provided that the client pays an appropriate proportion. Generic or common costs are simply shared costs incurred for the sensible purpose of keeping the costs of individual claims down. They are not fundamentally different from costs incurred solely for one client. No collateral agreement or separate informed consent requirement therefore applies.
3. The protection against inflated or excessive claims lies in detailed assessment under the Civil Procedure Rules 1998. On the standard basis, the court must consider whether costs were proportionately and reasonably incurred and proportionate and reasonable in amount under CPR 44.5(1)(a). Any doubt about reasonableness or proportionality is resolved in favour of the paying party under CPR 44.4(2)(b).
4. A client-care letter explaining the collective nature of some work, records identifying the number of clients sharing costs, and clearly defined agreements between firms are desirable and may assist in proving that a bill is reasonable and proportionate. They are not prerequisites to recovery. Questions concerning the proper apportionment and assessment of particular costs remained matters for detailed assessment and were not the issue decided on this appeal.

1. Court of Appeal (Civil Division): By [2007] EWCA Civ 43, dismissed Russell Young & Co’s appeal and upheld the conclusion that the conditional fee agreements were sufficient to support recovery of a proper share of generic costs.
2. Bristol County Court, Senior Costs Judge Hurst sitting as Recorder: On 12 April 2006, allowed the appeal from Master Wright and held that the conditional fee agreements were wide enough to encompass generic or common costs.
3. Supreme Court Costs Office, Master Wright: On 5 September 2005, held that no generic costs were recoverable because the conditional fee agreements did not establish a specific liability for such costs.