Wilsons Solicitors LLP v Bentine & Anor

For the one-fifth rule governing the costs of assessing a solicitor’s bill, every reduction from the amount billed counts towards the statutory threshold. The calculation does not exclude charges disallowed because they fell outside the retainer.

“Special circumstances” under section 70(10) of the Solicitors Act 1974 need not be exceptional. They must be significant and outside the ordinary course, and must justify departure from the default rule. A specialist costs judge may consider the issues raised, their relative importance and the parties’ success on them. The resulting evaluative costs decision should not be displaced on appeal unless affected by an error of law or principle.

Two appeals concerning sections 70(9) and 70(10) of the Solicitors Act 1974 were heard together.

In the first, a costs judge included charges for work undertaken without current instructions and charges arising from a solicitor-client costs dispute when calculating whether bills had been reduced by one fifth. Proudman J held in [2013] EWHC 3098 (Ch) that those charges fell outside the calculation, but nevertheless maintained an order requiring the solicitors to pay 60% of the client’s assessment costs because special circumstances existed.

In the second, 15 bills were compromised at an aggregate reduction of about 30%. The costs judge found special circumstances and ordered the client to pay 70% of the solicitor’s assessment costs after considering success on the principal issues. Andrews J set that order aside in [2014] EWHC 219 (QB). The central questions were how the one-fifth reduction is calculated and what amounts to special circumstances permitting departure from its costs consequence.

1. The Bentine appeal was dismissed unanimously. The costs judge correctly compared the entire sum billed with the amount ultimately assessed as due. Section 70(9) of the Solicitors Act 1974 provides no basis for separating charges disallowed because they were outside the retainer from other reductions. The client had therefore achieved a reduction exceeding one fifth and was the statutory successful party, subject to section 70(10).

2. In re Taxation of Costs; In re A Solicitor [1936] 1 KB 53 was decided per incuriam because the court had overlooked In re Clark. The latter authority established that, under the materially relevant statutory regime, the calculation included items disallowed because the client had not authorised the work. The costs judge’s order requiring the solicitors to pay 60% of the client’s assessment costs therefore stood.

3. Sales LJ additionally reasoned that a clear, up-to-date consolidation provision should ordinarily be construed according to its natural meaning without examining its legislative ancestry. Arden LJ and Sir Bernard Rix preferred to leave open how that approach interacts with a binding decision on identical wording. Sir Bernard considered that the amended word “reduced” was materially broader than “taxed off”. The court was nevertheless unanimous on the result because In re A Solicitor had been decided per incuriam.

4. The Stone Rowe Brewer appeal was allowed. “Special circumstances” in section 70(10) do not have to be exceptional. The costs judge must identify something significant and outside the ordinary course which justifies departing from the prima facie one-fifth rule. This is an evaluative judgment on which an experienced costs judge is particularly well placed to rule.

5. By a majority, Sales LJ and Arden LJ held that the costs judge had made no reviewable error in considering the separate issues, their relative importance, the costs they generated and the parties’ respective success. He had been aware that the client was the statutory winner under section 70(9). Section 70(10) nevertheless permitted him to decide what weight that factor should receive. His order that the client pay 70% of the solicitor’s assessment costs was restored.

6. Sir Bernard Rix agreed that special circumstances existed but dissented on the restored costs order. He considered that the costs judge had lost sight of the client’s statutory success and would have ordered no costs. The majority held that disagreement with the weight assigned by the specialist judge did not justify appellate intervention.

• Court of Appeal: In the Bentine proceedings, dismissed the solicitors’ appeal but rejected the High Court’s construction of section 70(9) of the Solicitors Act 1974. In the Stone Rowe Brewer proceedings, allowed the appeal and, by a majority, restored the costs judge’s order.
• High Court, Chancery Division: In [2013] EWHC 3098 (Ch), Proudman J held that charges outside the retainer were excluded from the one-fifth calculation, but dismissed the solicitors’ appeal because special circumstances justified requiring them to pay 60% of the client’s assessment costs.
• High Court, Queen’s Bench Division: In [2014] EWHC 219 (QB), Andrews J allowed the client’s appeal, holding that the costs judge had erred in finding special circumstances under section 70(10).
• Costs judge: In Bentine, Master O’Hare found a reduction exceeding one fifth and ordered the solicitors to pay 60% of the client’s assessment costs. In Stone Rowe Brewer, he found special circumstances and ordered the client to pay 70% of the solicitor’s assessment costs.