Minkin v Cawdery Kaye Fireman & Taylor

Solicitors may terminate a retainer for good reason and on reasonable notice. A client’s failure to pay part of the solicitors’ profit costs while an ordinary claim or statutory appeal continues is not, at common law, by itself good reason. Solicitors may nevertheless render an interim statutory bill and sue on it, or request a reasonable payment on account in contentious business. Under section 65(2) of the Solicitors Act 1974, failure to pay such a request within a reasonable time may justify withdrawal, subject to reasonable notice.

Where a solicitor wrongly refuses to continue acting because a client reasonably withholds payment, that refusal may be repudiatory. The solicitor cannot then recover fees for work under an uncompleted entire retainer.

Gary Minkin retained Cawdery Kaye Fireman & Taylor for matrimonial proceedings concerning occupation and non-molestation orders. The retainer contained cost estimates, provisions for interim billing and payment on account, and terms allowing suspension or termination for non-payment.

The firm’s first bill substantially exceeded the estimate. After Mr Minkin questioned it and declined to pay the balance, the firm repeatedly stated that it would not undertake further substantive work unless it was put in funds. Mr Minkin accepted that position and instructed the firm no longer to act.

On detailed assessment under section 70 of the Solicitors Act 1974, the Costs Judge held that the firm had repudiated the retainer and was not entitled to its costs, save for counsel’s fees. The firm appealed. The central issue was whether its refusal to continue acting constituted a justified suspension or termination, and what consequences followed.

1. Appeal dismissed. The appeal was by way of review. Because the Costs Judge’s conclusion depended on unchallenged primary facts and an evaluation of competing factors, interference was justified only if the conclusion fell outside the bounds of reasonable disagreement or involved an error of principle.
2. The contractual provisions had to be read harmoniously. The term permitting suspension or termination for an overdue account without reasonable justification was subject to the separate term requiring reasonable grounds and reasonable prior written notice. A client’s justification for withholding payment may be reasonable even if a later costs assessment shows that the bill was objectively justified. A non-frivolous, non-trivial and good-faith objection based on a substantial departure from an estimate may constitute reasonable justification.
3. Mr Minkin had reasonable justification for withholding the balance of the bill. The bill of £5,472.50 substantially exceeded the £3,500 plus VAT estimate. The firm knew of his limited funds, had promised written warning if the estimate might be exceeded, and gave no such warning. The unexpected work concerning the tenants accounted for only a small part of the increase.
4. The emails of 24 August, 25 August and 1 September 2009 refused further work unless payment was made. They conveyed termination rather than suspension. Since the firm lacked contractual justification for terminating on that ground, its refusal was a serious and repudiatory breach, which Mr Minkin accepted. The retainer was therefore terminated by the firm, not by Mr Minkin.
5. Section 65(2) of the Solicitors Act 1974 did not assist the firm. The bill was an interim statutory bill, not a request for payment on account. Although the firm could have sued on it, it had not done so. The court expressed no view on whether the contractual terms permitted an interim statutory bill at that stage.
6. The firm should have defined the retainer more clearly, complied with its promises concerning estimates, and considered whether the client’s non-payment was reasonably justified before terminating. The firm was not entitled to recover its fees under the uncompleted retainer.

• Senior Court Costs Office: Master O’Hare, sitting as a costs judge, assessed the bills and held that the firm had repudiated the retainer by refusing to continue acting without payment. The firm was denied its costs, subject to repayment of amounts received less counsel’s fees.
• High Court (Queen’s Bench Division): Mr Justice Cranston dismissed the firm’s appeal and upheld the material conclusions of the Costs Judge.