Bilkus v Stockler Brunton (A Firm) (Rev 1)

Work done under a court order to obtain an expert valuation that is necessary to work out and complete the relief ordered in litigation is contentious business within the Solicitors Act 1974. It remains so although the order is procedurally final and the valuer acts as an expert rather than an arbitrator.

A solicitor who continues to act after agreeing an hourly-rate retainer may not charge on a new basis without making that intention clear and giving the client an informed opportunity to accept, reject or end the instruction. A bill may be withdrawn or amended only sparingly, ordinarily for genuine mistake or inadvertence. A deliberate and misleading claim for an unjustified uplift does not qualify for relief.

The solicitors acted for Mr Bilkus in litigation concerning his interest in a company. After an unfair-prejudice petition, the High Court made a final order requiring the sale of his share at a price to be certified by an expert valuer. The solicitors continued to act in the valuation process under the original hourly-rate client-care letter.

After the valuer assessed the share at £6.6 million, the solicitors delivered a final bill including £50,000 described as an uplift on all bills since 2001. On detailed assessment, the costs judge rejected the uplift and refused amendment of the bill. Henderson J dismissed the solicitors’ appeal: [2009] EWHC 1957 (Ch).

The Court of Appeal considered whether the valuation work was contentious business, whether the original retainer governed it, and whether the bill could be amended.

1. Appeal dismissed. The valuation work was contentious business under section 87(1) of the Solicitors Act 1974. The statutory phrase must be construed as a whole. Work done after proceedings have completed is ordinarily done in consequence of them, not for their purposes. However, this valuation was ordered and directed by the court, and was a necessary step in working out and completing the relief. It could not sensibly be separated from the proceedings.

2. The fact that the order was a final order as a matter of procedure did not alter that conclusion. Longmore LJ and Ward LJ agreed that the valuation remained part and parcel of the contentious proceedings until the ordered sale could be completed. The court did not decide the wider position of conveyancing performed after a matrimonial property-transfer order.

3. In any event, the signed letter of 25 January 2001 governed the solicitors’ continuing work. A single written agreement may cover contentious and non-contentious business. A reasonable client was entitled to assume that the agreed hourly charging basis continued because the solicitors neither sought agreement to, nor notified the client of, any new basis. A solicitor seeking to charge differently must clearly inform the client and give an informed opportunity to agree, reject or discontinue the instruction. No value element was therefore recoverable.

4. Although unnecessary to the result, the court upheld the refusal to amend the bill. The court’s inherent jurisdiction to permit withdrawal or amendment is exercised carefully and sparingly for genuine mistake or inadvertence. The bill’s description of an uplift on all bills was deliberate and misleading, and the solicitors had not established an error warranting relief. The claimed uplift was consequently irrecoverable in any part.

• Court of Appeal (Civil Division): dismissed the solicitors’ appeal: [2010] EWCA Civ 101.
• High Court of Justice, Chancery Division: Henderson J, sitting with assessors, dismissed the solicitors’ appeal from the costs judge: [2009] EWHC 1957 (Ch).
• Costs Judge: Master Gordon-Saker rejected the £50,000 uplift and refused permission to amend the bill.