Kris Motor Spares Ltd v Fox Williams LLP

An appeal from a costs decision is a review, not a rehearing. Findings which depend on witness credibility will not ordinarily be overturned unless plainly wrong. A solicitor may terminate a conditional fee agreement under an express contractual power where the client deliberately conceals material information and thereby breaches an obligation not to mislead. Reasonable notice is not necessarily required where the funding arrangement ends but the retainer continues. Under section 70 of the Solicitors Act 1974, a reservation of the right to taxation, payment under protest, pressure to pay and disputed items must be assessed in the circumstances as a whole. A reservation is important but is not automatically a special circumstance requiring detailed assessment.

Kris Motor Spares Limited appealed against Master Rogers’s refusal to order detailed assessment of bills delivered by its former solicitors, Fox Williams LLP. The parties proceeded on the basis that the bill had been paid, so the issue was whether special circumstances existed under section 70(3)(c) of the Solicitors Act 1974.

A related issue was whether Fox Williams had lawfully terminated a conditional fee agreement after discovering that the client had failed to disclose material information concerning the independence and remuneration of an expert witness. The appeal also challenged factual findings, the admission of fresh evidence, and the assessment of special circumstances.

1. Appeal dismissed. The appeal was a review under CPR 52.11(1), not a rehearing. The judge gave considerable weight to Master Rogers’s assessment of witnesses, particularly because the challenged findings depended substantially on credibility. The findings could not be overturned unless plainly wrong. The principles in Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577 and Conlon v Simms [2008] 1 WLR 484 were satisfied.

2. Master Rogers was entitled to find that the client knew of Square Mile’s involvement, understood the importance of the expert’s independence, and deliberately withheld relevant information from Fox Williams. That failure amounted to deliberate misleading within condition 2 of the conditional fee agreement. The factual error concerning who had suggested replacement invoices did not undermine the overall conclusion, which was supported by the evidence as a whole.

3. Fox Williams were entitled to terminate the conditional fee agreement under condition 8.5. The agreement’s contractual power of termination could coexist with a common-law right to accept repudiatory breach. The reasoning in Laing Management Ltd v Aegon Insurance Co (UK) Ltd (1997) 86 BLR and Dalkia Utilities Services PLC v Celtech International Ltd [2006] EWHC 63 (Comm) supported that conclusion.

4. No term requiring reasonable notice before termination of the funding arrangement was necessarily implied. The retainer continued after termination, and the client was not left without representation. The principle in Underwood & Piper v Lewis [1894] QB 306 therefore did not require a different result.

5. The fresh evidence was excluded under CPR 52.11(2). It could have been obtained with reasonable diligence before Master Rogers and was unlikely materially to affect the result. The criteria in Ladd v Marshall [1954] 1 WLR 1489 were not met.

6. Even assuming that the client had reserved the right to taxation, the reservation was not decisive. The court considered the substantial commercial nature of the litigation, the client’s experience, the repeated payment of detailed interim bills, the limited and vague objections, the absence of evidence of overcharging, and the fact that the dispute principally concerned the contractual 30% difference. Taken together, those matters did not amount to special circumstances under section 70(3)(c) of the Solicitors Act 1974.

7. The client was ordered to pay Fox Williams’s costs. The costs of the appeal were summarily assessed at £38,817.60.

• High Court (Queen’s Bench Division): appeal from Master Rogers’s refusal to order detailed assessment dismissed. The court upheld the findings that the conditional fee agreement had been lawfully terminated and that no special circumstances existed.