Bentine v Bentine

On a detailed assessment under Part III of the Solicitors Act 1974, sums disallowed because the solicitor had no retainer are outside the bill for the purposes of the one-fifth rule in section 70(9). This applies whether want of retainer is raised by the client, a litigation friend, the Official Solicitor or the costs judge. Work done against former clients, rather than for or on their behalf, is likewise outside the assessment.

The court may nevertheless depart from the one-fifth rule where special circumstances exist under section 70(10). The solicitor’s improper inclusion of irrecoverable charges, the resulting disproportionate assessment and the need for a public officer to take reasonable points may justify that course.

The underlying proceedings concerned a dispute between a mother and daughter about beneficial interests in property. After the daughter lost capacity, the Official Solicitor became her litigation friend. The proceedings were settled, and the daughter’s solicitors’ invoices were subjected to a detailed assessment under Part III of the Solicitors Act 1974.

The Costs Judge included charges disallowed for want of retainer when applying the one-fifth rule in section 70(9), but awarded only 60% of the daughter’s assessment costs because of special circumstances under section 70(10). The solicitors appealed, principally relying on Re a Solicitor [1936] 1 KB 523.

1. The appeal was dismissed. The solicitors succeeded on the interpretation of the one-fifth rule but failed on the separate question of special circumstances.

2. Re a Solicitor [1936] 1 KB 523 was binding. Its principle was that costs outside the client’s retainer were not reductions made on the assessment or taxation of the bill. They were therefore excluded when calculating whether the bill had been reduced by one-fifth under section 70(9) of the Solicitors Act 1974.

3. The distinction was between charges for which the client was not liable at all and charges for which the client was liable but which were unreasonable. It did not matter who raised want of retainer. The issue was a necessary preliminary to assessment. Charges for work against former clients, including work concerning a costs dispute and an application to the Costs Office, were outside the retainer and attracted the same treatment.

4. The amendments made by Schedule 16 to the Legal Services Act 2007 were terminological. Replacing “tax”, “taxation” and “taxed off” with “assess”, “assessment” and “reduced” did not alter the substance of the rule. The reasoning in Re a Solicitor therefore continued to apply.

5. Section 70(10) permitted departure from the statutory rule where special circumstances existed. The improper inclusion of charges outside the retainer, the disproportionate time and expense of the assessment, and the Official Solicitor’s obligation to take reasonable points for a protected party justified such a departure. An issue-based costs order was rejected as disproportionate. The order that the solicitors pay the assessment costs, subject to the existing 40% reduction, was maintained.

The judgment was an appeal from the assessment and order of Master O’Hare, the Costs Judge, dated 31 August 2012 and 12 November 2012. The High Court upheld the operative costs order, while rejecting the Costs Judge’s approach to the one-fifth calculation.