Phillips & Co (a firm) v Bath Housing Co-Operative Ltd

A solicitor’s claim for reasonable remuneration is within the phrase “debt or other liquidated pecuniary claim” in section 29(5)(a) of the Limitation Act 1980, even though its amount has not been fixed by agreement, assessment or judgment. It may therefore be acknowledged so that the limitation period begins again.

An acknowledgment need not accept the amount demanded. A signed written response which disputes the amount claimed, but accepts in substance that something is payable, may acknowledge the claim. Whether it does so depends on the meaning of the particular communication in its context.

A firm of solicitors sought approximately £52,000 in professional fees and interest for obtaining possession of a flat on behalf of a housing co-operative. The remuneration had not been agreed or assessed. Proceedings were issued more than six years after the work ended, but within six years of a letter in which the client protested about the amount claimed and deferred consideration of the invoice.

The District Judge held that the letter was not an acknowledgment and dismissed the claim. His Honour Judge Hughes QC allowed the solicitors’ appeal, holding that the claim fell within section 29(5) of the Limitation Act 1980 and had been acknowledged.

The Court of Appeal had to decide whether an unassessed solicitor’s claim was a “debt or other liquidated pecuniary claim” and whether the client’s letter acknowledged it.

1. The appeal was dismissed unanimously. The solicitors’ claim fell within section 29(5)(a) of the Limitation Act 1980. The client’s letter acknowledged the claim, so the proceedings were not time-barred. The claim remained to be determined in relation to the client’s other defences.

2. A solicitor retained without an agreed basis of remuneration has a claim in debt, rather than damages, in the nature of a quantum meruit. The amount is not finally ascertained until fixed by agreement, assessment or judgment. If disputed, the court determines the reasonable amount through the applicable statutory assessment process.

3. The statutory expression “debt or other liquidated pecuniary claim” is not confined to a liability whose amount has already been ascertained or can be fixed by arithmetic alone. Its legislative history showed that the expression preserved the earlier treatment of claims recoverable through the common indebitatus counts. Those included reasonable remuneration for work even where the amount required judicial assessment. It would have been anomalous for the Limitation Act 1939 to narrow the earlier range of claims capable of acknowledgment.

4. Insolvency authorities requiring a liquidated sum were distinguishable because of their different statutory context. Likewise, the description of an unassessed solicitor’s claim as not being for a liquidated sum in Turner & Co v O Palomo SA concerned entitlement to judgment and did not determine the meaning of section 29(5).

5. An acknowledgment need not identify or accept a particular amount. The client’s letter did more than acknowledge receipt of the demand. It disputed the level of the costs and postponed detailed consideration of the invoice, without disputing that something was payable. In substance, it acknowledged that a sum was owed.

Lloyd LJ gave the leading judgment. McFarlane and Longmore LJJ agreed. Longmore LJ added that the technical statutory phrase retained the meaning it bore when introduced in 1939.

1. Court of Appeal (Civil Division): The client’s appeal was dismissed unanimously. The court affirmed that the claim fell within section 29(5) of the Limitation Act 1980 and had been acknowledged: [2012] EWCA Civ 1591.

2. Salisbury County Court, His Honour Judge Hughes QC: The solicitors’ appeal was allowed on 23 August 2011. The judge held that section 29(5) applied and that the client’s letter was an acknowledgment, leaving the remaining defences to be determined.

3. Salisbury County Court, District Judge: The letter was held not to be an acknowledgment, and the solicitors’ claim was dismissed.