Ashia Centur Ltd v Barker Gillette LLP

A promise to waive solicitors’ charges is not contractually binding merely because it may benefit the promisor. A variation requires offer, acceptance and consideration. The promisee must do, or promise to do, something in return, expressly or by implication.

Where reliance, waiver or estoppel is alleged, there must be evidence that the client acted or refrained from acting on the representation. An analogy with costs-estimate authorities does not assist where the client took no relevant action before the solicitor clarified the position.

The solicitors represented a company in professional-negligence proceedings against its former solicitors. Following judgment and a subsequent costs process, the solicitors wrote that they would not charge for work carried out after judgment and would not charge for the detailed assessment, apart from the costs draftsman’s fees.

On detailed assessment, the Master held that the promise related to work after 11 June 2004 but was unsupported by consideration. The client appealed, arguing variation of contract, waiver, estoppel, and that the charges were unreasonable and unjust. The central issues were whether the promise was binding or otherwise precluded recovery, and whether the costs should be disallowed on that basis.

1. The appeal was dismissed. The decision of the Master on detailed assessment was upheld.
2. The court treated the client’s first three grounds as contractual or equitable arguments concerning variation, waiver and estoppel. A variation of an existing retainer requires offer, acceptance and consideration. There was no evidence that, after receiving the letter of 2 July 2007, the client did anything or refrained from doing anything in reliance on it before the solicitors clarified their position on 20 August 2007.
3. A promise does not become contractually binding merely because making it is potentially advantageous to the promisor. The promisee must do or refrain from doing something, and there must be acceptance, expressly or by implication. The correspondence disclosed no acceptance, promise, forbearance or reliance capable of supporting the alleged agreement.
4. An argument that the July letter recorded an earlier oral agreement could not properly be raised for the first time on appeal. In any event, the earlier correspondence did not demonstrate offer, acceptance and consideration.
5. The proposed analogy with costs-estimate cases was rejected. An estimate may inform decisions about the conduct of litigation over time, but there was no evidence that the client acted on the July letter during the six-week period before the solicitors’ position was made clear. The court therefore found no basis for disallowing the costs as unreasonable or unjust.

The appeal was brought against the Master’s decision of 21 April 2010 made on detailed assessment of costs. The High Court dismissed the appeal and upheld the Master’s decision.