Slade (t/a Richard Slade & Company) v Abbhi

A person who promises to fund another person’s legal costs is not thereby the party chargeable with the solicitor’s bills for the purposes of sections 69 and 70 of the Solicitors Act 1974. The question depends on the contractual relationship and on whether the solicitor is entitled to look to that person for payment of the bills. A funding obligation performed through loans to the client remains distinct from liability under the client’s retainer. The statutory restrictions on proceedings for solicitors’ bills therefore did not reduce the claimant’s contractual damages to nil. The court also confirmed its residual common-law jurisdiction to assess the reasonableness of solicitors’ charges, even where statutory assessment procedures are unavailable or out of time. A statutory defence first raised after trial may be too late where it would substantially reopen liability issues.

The claimant had previously obtained judgment establishing that the defendant had made an oral agreement to fund the legal costs of litigation conducted for the defendant’s father-in-law. The earlier judgment treated the defendant’s liability as primary and not as a guarantee within section 4 of the Statute of Frauds 1677. At the subsequent quantum hearing, the defendant argued that, because the bills had not been delivered to him, section 69(1) of the Solicitors Act 1974 meant that the recoverable amount was nil.

The court considered whether the defendant was the party chargeable with the bills under section 70, whether the statutory argument had been raised too late, whether a common-law assessment was available, and whether permission to appeal should be granted.

1. Application of the Solicitors Act 1974. The defendant was not the party chargeable with the bills. The agreement required him to provide funds by lending money to the client, who would then pay the solicitor. It did not make the defendant contractually liable for the bills as such, nor did it contemplate delivery of the bills to him. The client remained the party chargeable under sections 69 and 70.
2. The defendant’s primary liability under the oral funding agreement did not make him a guarantor or a person liable to pay the bills within section 71. His liability existed independently of the client’s liability, and the two liabilities were not co-extensive. The VAT treatment of the bills reinforced that conclusion.
3. The court rejected the submission that the claim was worth nil or that only declaratory relief was available. The statutory provisions restricted precipitate proceedings on solicitors’ bills; they did not extinguish the claimant’s contractual claim for damages for breach of the funding agreement.
4. Procedural point. The court observed obiter that, even if the statutory argument had succeeded, it would have been too late to rely on it as a defence after the liability trial. The argument had not been properly pleaded and would in substance have sought to undo the determination of liability.
5. Common-law assessment. The court confirmed that it could direct an assessment of the reasonableness of the solicitor’s charges under its ordinary jurisdiction, notwithstanding the absence or expiry of a statutory assessment route. A Costs Judge was directed to conduct that assessment, with the defendant to identify disputed items in a Scott Schedule.
6. Judgment was entered for damages to be assessed. An interim payment of £310,000 was ordered, the defendant’s application for permission to appeal and for a stay was refused, and the defendant was ordered to pay the claimant’s costs to date, subject to assessment.

The judgment followed the court’s earlier liability judgment in Slade v Abbhi, [2018] EWHC 2039 (Comm). The present decision determined the consequences for quantum, directed a common-law assessment, and refused permission to appeal and a stay in relation to the earlier finding that section 4 of the Statute of Frauds 1677 did not apply.