Butler v Bankside Commercial Ltd

Under a conditional fee agreement incorporating the Law Society’s standard terms, an opinion about “making a settlement” is not confined to advice on accepting an offer made by the opponent. It may include advice to make a counter-offer or otherwise take the initiative in negotiations. A settlement is an end point, but making one is a process. Whether particular advice falls within the clause remains fact-sensitive. Timing or the circumstances in which advice was given may also raise an implied-term issue preventing reliance on the clause. On the facts, the client’s rejection of detailed advice to make a realistic offer fell within the clause and entitled the solicitors to terminate the retainer and recover the contractual costs.

Bankside Commercial Ltd acted for Helene Butler under a conditional fee agreement in proceedings against Nikon Metrology NV. After Nikon made a settlement offer, Bankside advised Butler to make a counter-offer of €90,000 plus 50% of costs. Butler rejected that advice, and Bankside terminated the retainer under clause 7(b)(iii) of the incorporated standard terms.

Bankside later obtained summary judgment for its recoverable costs before Master Yoxall. Butler appealed on the permitted ground that advice to make an offer was not advice about “making a settlement” within the clause.

1. Appeal dismissed. Master Yoxall had correctly interpreted clause 7(b)(iii), and Butler had no real prospect of successfully defending the claim.
2. The clause was not limited to advice about accepting an offer made by the opponent. That narrow construction was inconsistent with the language and would create arbitrary distinctions lacking logical and practical coherence. A solicitor’s opinion about making an offer may therefore be an opinion about “making a settlement”.
3. The court treated settlement as a process rather than merely an endpoint. In commercial litigation, circumstances may make it appropriate for a claimant to initiate negotiations, including where previous negotiations have failed, the opponent is delaying, the opponent has chosen not to make the first move, or its financial position is deteriorating.
4. The contractual protection afforded to solicitors undertaking significant economic risks under a conditional fee agreement should not depend on whether the opponent has made a contractual offer capable of acceptance. Professional obligations, possible disciplinary consequences and potential negligence claims provide safeguards against improper advice.
5. The observations of Jones v Wrexham BC [2008] 1 WLR 1590 did not define the scope of clause 7(b)(iii). They illustrated circumstances in which it might apply and therefore did not assist the appellant’s narrower construction.
6. The meaning of the clause remains fact-sensitive. Particular timing or circumstances may support an argument that an implied term prevents solicitors from relying on their opinion to trigger the clause. No such issue arose arguably on the facts of this appeal.

• High Court (Queen’s Bench Division): Summary judgment had previously been entered for Bankside Commercial Ltd by Master Yoxall. The appeal was dismissed.