Assaubayev & Ors v Michael Wilson & Partners, Ltd

Part III of the Solicitors Act 1974 gives the court jurisdiction to grant statutory remuneration relief against solicitors and recognised bodies. It does not extend that jurisdiction to an unqualified company merely because the company acted, or represented itself as acting, as a solicitor. Contract and estoppel cannot create statutory jurisdiction where Parliament has not conferred it. The court’s inherent supervisory jurisdiction is distinct from its ordinary jurisdiction and cannot be exercised by an arbitrator. Claims within the ordinary jurisdiction may nevertheless be arbitrated, while the court may stay proceedings to allow the arbitrator to determine the existence and scope of the arbitration agreement.

The defendant appealed against Master Campbell’s refusal of a stay of proceedings in the Senior Courts Costs Office. The claimants sought relief under Part III of the Solicitors Act 1974 concerning substantial fees charged under retainers containing arbitration provisions. The defendant was a British Virgin Islands company which accepted that it was neither a solicitor nor a recognised body, although it had filed acknowledgments of service and undertaken other work in English proceedings.

The appeal raised whether Part III relief was available against the defendant, whether the alleged arbitration agreement required a stay, and how the amended claims invoking the court’s inherent supervisory and ordinary jurisdictions should proceed.

1. Part III jurisdiction. The appeal succeeded on the jurisdiction issue. The defendant was neither a solicitor within section 87(1) of the Solicitors Act 1974 nor a recognised body under section 9 of the Administration of Justice Act 1985. Part III relief was therefore unavailable against it. The fact that its managing director was an admitted solicitor did not bring the company within Part III, and there was no basis for piercing the corporate veil.
2. Contract and estoppel could not create Part III jurisdiction. The statutory scheme expressly identifies the persons against whom the remuneration provisions operate. Its provisions concerning unqualified persons did not treat such persons as solicitors for the purposes of Part III. The original claim, which sought only Part III relief, was consequently ordered to be struck out.
3. The court declined to decide summarily whether the defendant’s conduct attracted the inherent supervisory jurisdiction. The authorities showed that the scope of that jurisdiction over persons who were not solicitors was open to review, particularly after the statutory changes introduced by the Legal Services Act 2007. The issue should be considered, if necessary, after the facts and the availability of other remedies had been established.
4. The inherent supervisory jurisdiction was constitutionally linked to the court and could not be exercised by an arbitrator. It was therefore not itself capable of being transferred to arbitration. The ordinary jurisdiction, including disputes concerning fees, enforceability, illegality and champerty, was in principle arbitrable.
5. The suggested summary conclusion that no fees could be recovered was rejected. The court could not resolve the relevant statutory, contractual and factual questions summarily. Applying the approach in Joint Stock Company “Aeroflot-Russian Airlines” v Berezovsky [2013] EWCA Civ 784, the existence and scope of the arbitration agreement, including the late challenges to signature and authority, should be determined by the arbitrator under section 30 of the Arbitration Act 1996, subject to the statutory supervision available under that Act.
6. The amended claims under the ordinary and inherent supervisory jurisdictions were stayed under the court’s inherent stay jurisdiction pending the arbitration, or any initial jurisdictional award. The references to Part III as a basis for relief were struck out. Consequential orders, including those concerning the August-retainer and Terra Raf invoices, were left to be agreed.

• High Court (Queen’s Bench Division): The appeal from Master Campbell’s order dated 10 September 2012 was allowed in part. The original Part III claim was struck out, and the remaining amended claims were stayed under the inherent stay jurisdiction.
• Senior Courts Costs Office: Master Campbell refused the defendant’s application for a stay, having found an arbitration agreement within section 9(1) of the Arbitration Act 1996 but concluding that section 9(4) prevented a stay.