Bilkus v Stockler Brunton (a firm)

Valuation work carried out pursuant to a court order and as an essential step in determining relief in existing proceedings is contentious business. A solicitor cannot charge an uplift for such work without a compliant conditional fee agreement. Where a written contentious business agreement specifies hourly rates and disbursements, it excludes any additional uplift unless expressly provided. Permission to amend or replace a solicitor’s bill should be granted only in exceptional circumstances, particularly where the proposed correction would introduce a charge contrary to the retainer or statute.

The defendant firm appealed against a costs judge’s order requiring it to repay a £50,000 uplift charged to its former client. The client had instructed the firm in company litigation, including a petition under section 459 of the Companies Act 1985 and a subsequent court-directed valuation of his shares. The firm’s written retainer provided for hourly charges and disbursements. Its final invoice described the £50,000 as an uplift on all bills since 2001, and the firm later sought permission to amend the description so that it referred to the factors in the Solicitors’ (Non-Contentious Business) Remuneration Order 1994. The central issues were whether the valuation work was contentious business, whether the retainer permitted an uplift, and whether the invoice should be amended.

1. The appeal was dismissed. The valuation work was contentious business within section 87(1) of the Solicitors Act 1974. The underlying section 459 proceedings had been begun before a court, and the valuation was an integral and essential step in ascertaining the relief to which the client was entitled. It was performed pursuant to the court’s directions and for the purposes of those proceedings, even though the valuation itself was carried out by an expert rather than by the court.
2. The fact that the court had made a final order did not alter that conclusion. Proceedings were to be regarded as continuing, for this purpose, at least until the relief awarded had been ascertained. The relevant question was the relationship between the work and the proceedings, not the identity of the solicitor undertaking it.
3. There was no lawful basis for charging an uplift on contentious business in the absence of a compliant conditional fee agreement. Under sections 59(1) and 60(4) of the Solicitors’ Act 1974, the written agreement provided for hourly charges at the notified rates and disbursements, and excluded any further claim except for agreed or expressly excepted costs.
4. Even if the valuation work had been non-contentious, the evidence supported the conclusion that it was covered by the same remuneration terms. The suggestion that the firm had an unwritten non-contentious business agreement permitting a reasonable charge under the Solicitors’ (Non-Contentious Business) Remuneration Order 1994 was rejected as an attempt to justify the charge after the event and as contrary to section 57(3) of the Solicitors’ Act 1974.
5. Permission to amend a bill should be granted only in exceptional circumstances, as explained in Polak v Marchioness of Winchester [1956] 1 WLR 818. The present case was materially different because the proposed uplift breached the retainer, purported to apply to earlier final bills, and concerned contentious business. The firm’s error showed serious disregard of its contractual and statutory obligations, so the refusal to amend the invoice was correct.

The judgment itself records that the appeal was brought from an order of Master Gordon-Saker dated 8 December 2008 in detailed assessment proceedings under section 70 of the Solicitors Act 1974. Permission to appeal was granted by Lewison J on 11 March 2009. The High Court dismissed the appeal.