Edwin Coe LLP v Aidiniantz & Ors

A solicitor’s duty is to exercise the skill and care expected of a reasonably competent solicitor, assessed in light of the client’s knowledge, experience and the scope of the retainer. The solicitor need not explain what the client already understands or what is obvious. A client’s agreement to pay a solicitor’s bill replaces the common-law right to challenge its reasonableness, but does not automatically exclude the statutory discretion to order assessment under Solicitors Act 1974. For unpaid bills, assessment is discretionary after the statutory period. For paid bills, special circumstances must be shown. A claim in negligence also requires proof that the alleged breach caused recoverable loss.

Edwin Coe LLP claimed unpaid legal fees from John Aidiniantz and Rollerteam Ltd. Mr Aidiniantz, Rollerteam Ltd, The Sherlock Holmes Museum Ltd and Sherlock Holmes Ltd brought a Part 20 claim alleging negligent advice about the effect of a freezing order in related proceedings. They contended that Coe should have advised them to use money paid into court to obtain the release of particular defendants from the order, rather than pursuing an unsuccessful discharge application.

The defendants also sought assessment of Coe’s bills under Solicitors Act 1974 s.70 or at common law. The issues included the scope of Coe’s duty, causation and loss, the effect of an agreement to pay the bills, the availability of assessment, and the scope of an indemnity given by Mr Aidiniantz.

1. The Part 20 negligence claim was dismissed. Coe had advised in its letter of 18 December 2012 that the freezing order could cease to have effect if the specified security was paid into court or alternative security was provided. That advice was sufficient. The wording of the order was capable of being understood by a person of reasonable intelligence, and Coe was not required to pursue the option further when Mr Aidiniantz had shown no interest in it.

2. By the conference on 20 December 2012, Coe knew of the £535,000 cash reserve, but the ownership and usefulness of applying it under the security provision were unclear. The defendants’ businesses were not materially affected by the order. No useful benefit was shown to have been lost, and the evidence established that Mr Aidiniantz would have pursued the discharge application in any event. Causation and recoverable loss were therefore absent.

3. The parties agreed that £103,500.17 was payable for outstanding fees. Under the common law, that agreement was a compromise which prevented assessment of unpaid bills. It did not, without more, waive the statutory right to seek assessment under Solicitors Act 1974 s.70.

4. No assessment was ordered. The defendants had not shown sufficient grounds for exercising the discretion under s.70(2), nor special circumstances under s.70(3). They produced no costs evidence demonstrating that the charges were unreasonably high. Agreement of the bills and the absence of any substantive challenge to hourly rates, time or disbursements were material considerations.

5. The indemnity covered the fees incurred in both the Riley Action and the Main Action. Judgment was entered for Coe against Mr Aidiniantz for £103,300.17 and against Rollerteam for £75,907.17, with interest at 2 per cent per annum from 15 March 2013 until judgment. The Part 20 claim was dismissed.