Baker Tilly (a firm) v Makar

A professional retainer may arise from instructions accepted by conduct, even where no fee has been expressly agreed. The law may imply an obligation to pay a reasonable fee for work requested and performed. A retainer to prepare an expert report may be terminated when the underlying proceedings settle, with reasonable remuneration due for work completed. A further retainer may arise from a later express request accepted by conduct. In conflict cases, the relevant question is whether the professional holds confidential information belonging to another person which is, or may be, relevant to the new engagement. A perceived conflict, without relevant confidential information or an actual conflict of interest, does not itself create a duty of disclosure.

Baker Tilly claimed £35,250, including VAT, for professional work undertaken for Mira Makar in connection with her Employment Tribunal proceedings against Triad Group plc. Makar contended that Baker Tilly had agreed to produce a report, including for presentation to regulatory authorities, and that payment was conditional on production of that report. She also alleged that Baker Tilly had failed to disclose a conflict arising from earlier discussions with Triad about audit work.

The court tried liability and quantum on Baker Tilly’s claim and liability on Makar’s Part 20 claims. The central issues were the formation and scope of the retainers, the effect of settlement of the Employment Tribunal proceedings, the identity of the proposed expert, and whether any conflict or confidentiality obligation defeated the claim.

1. Retainers and remuneration. The instruction sent on 17 October 2006 by Burges Salmon amounted to an offer that Baker Tilly should read into documents in preparation for expert evidence. Baker Tilly accepted that offer by conduct. Since no price was specified, Makar was liable to pay a reasonable fee. The sum of £5,850 was reasonable.
2. The letter of instruction dated 30 October 2006 and Baker Tilly’s letter of acceptance formed a second retainer for preparation of an expert report for the Employment Tribunal. The absence of an agreed price did not prevent formation of the contract. The later engagement letter and Baker Tilly’s standard terms were not incorporated.
3. Settlement of the Employment Tribunal proceedings terminated the second retainer because the report was no longer required for those proceedings. The court considered that an implied term permitted termination before completion, with liability for reasonable fees incurred up to termination. Makar therefore could not rely on the non-production of the report as a defence.
4. After settlement, Burges Salmon expressly requested continued work on the basis that the cost would not exceed £30,000 plus VAT. Baker Tilly accepted that offer by continuing work. The third retainer ended at the meeting on 20 November 2006, when the parties agreed that no further work would be done pending Triad’s interim results and further instructions, which were never given.
5. There was no express term requiring Mr Taub to act as expert witness. Baker Tilly was entitled to charge for work done by Mr Tristem.
6. Applying the principles in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222, the relevant concern was possession of confidential information belonging to Triad which was or might be relevant to Makar’s engagement. No actual conflict existed merely because Baker Tilly had previously discussed possible audit work with Triad. Mr Harwood and Mr Newman did not become involved in Makar’s work and were not shown to possess relevant confidential information. No duty of disclosure arose.
7. Judgment was entered for Baker Tilly in the sum of £35,250, with interest to be determined. Makar’s Part 20 claims were dismissed.