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

The Court of Appeal held that the solicitors’ work in relation to the expert valuation ordered by the court formed part of the contentious proceedings for the purposes of the Solicitors Act 1974 and thus was not eligible for a non-contentious value element or uplift under the Solicitors (Non-Contentious Business) Remuneration Order 1994. The court also held that the written retainer in the client care letter of 25 January 2001 governed the basis of remuneration for all work carried out and, because the solicitors had not informed the client of any change in basis, they could not claim a supplemental value element. Finally, the court upheld the costs judge’s refusal to permit amendment of the invoice because there was no genuine mistake: the invoice deliberately described a £50,000 uplift as applying to all bills and that misdescription could not be corrected in the context of a taxation under section 70 of the 1974 Act.

Key statutory provisions: Solicitors Act 1974 (definitions of contentious and non-contentious business, sections 57, 59, 60(4), 69 and 70) and the Solicitors (Non-Contentious Business) Remuneration Order 1994 (article 3).

Background and parties: The claimant, Mr Michael Bilkus, retained the firm Stockler Brunton to pursue rights in a company, Clearsprings. The firm acted through litigation in the Chancery Division which culminated in an order requiring valuation and transfer terms. After an expert valuer certified a £6.6 million valuation, the solicitors presented a final bill which included a £50,000 item described as an "uplift" or "value factor".

Procedural history: Mr Bilkus applied under section 70 of the Solicitors Act 1974 for detailed assessment of the bills. Master Gordon-Saker refused permission to amend the invoice and disallowed the £50,000 claim. Henderson J (sitting with assessors) dismissed the solicitors’ appeal. The solicitors appealed to the Court of Appeal.

Relief sought and issues:

• The solicitors sought to recover a £50,000 value element (an uplift) by way of remuneration.
• The court framed three principal issues: (i) whether the work for which the uplift was claimed was contentious or non-contentious under the Solicitors Act 1974; (ii) if non-contentious, whether the written retainer permitted a value element; and (iii) whether the solicitors were precluded from claiming the uplift because of the description in their invoice and whether amendment of the bill should be permitted.

Court’s reasoning:

• On contentious/non-contentious classification, the court concluded the valuation was carried out pursuant to a court order and was an integral part of ascertaining the relief awarded by the court; proceedings therefore continued for the purposes of the statutory definition until that relief was ascertained. Work done under those circumstances was contentious and excluded from a non-contentious value element by section 60(4) of the Solicitors Act 1974.
• On the retainer, the letter of 25 January 2001 governed the basis of charging (hourly rates and disbursements) and continued to apply to subsequent work unless the solicitor gave clear notice and obtained the client’s informed agreement to a different basis. No such variation was communicated or agreed, so no uplift could be claimed outside that agreement.
• On amendment of the bill, the court reiterated that the statutory taxation regime gives the client the right to have the bill as delivered taxed and that the court’s inherent jurisdiction to permit amendment is to be exercised sparingly for genuine mistake or inadvertence. The solicitors had not shown a genuine mistake: the invoice deliberately described the uplift as applying to all bills and the amendment was therefore refused.

Disposition: The Court of Appeal dismissed the appeal and upheld the refusal to allow the uplift or to permit amendment of the bill.

Appeal dismissed. The Court of Appeal agreed with Henderson J and Master Gordon-Saker that (1) the valuation work was contentious because it was carried out pursuant to court directions and formed part of the process of ascertaining the relief awarded; (2) the written retainer of 25 January 2001 continued to govern the basis of remuneration and did not permit an uplift; and (3) the costs judge rightly refused permission to amend the invoice because there was no genuine mistake and the misdescription was deliberate, engaging the strict exercise of the court’s discretion under the taxation regime.

Appeal from the High Court of Justice, Chancery Division (Henderson J, sitting with Assessors) [2009] EWHC 1957 (Ch); Court of Appeal (Civil Division) dismissed the appeal [2010] EWCA Civ 101.