Rippon Patel And French LLP v Mowlam

For the purposes of section 70(4) of the Solicitors Act 1974, payment of a solicitor’s bill means payment of the entire sum billed. Part payment, or retention of money in a client account, does not prevent the court from ordering assessment.

Where assessment is sought more than 12 months after delivery of an unpaid bill, “special circumstances” involve a value judgment comparing the case with the ordinary case. An appellate court should interfere only for an error of law or analysis, perversity, or a decision outside the generous ambit of discretion. Delay and prejudice may be relevant to the discretion whether to order assessment once special circumstances are established.

The respondent, a former client, sought a detailed assessment of the appellant solicitors’ bill under section 70 of the Solicitors Act 1974. The bill was delivered in September 2015 and the assessment application was made in November 2018.

The Senior Court Costs Office Master found that the bill had not been paid because the parties remained in dispute about the amount due and VAT. He also found special circumstances, arising principally from uncertainty about the costs incurred and the respondent’s understanding of the settlement terms, and ordered assessment.

The solicitors appealed on payment, special circumstances, delay, security for costs and the proposed scope of the assessment.

1. Appeal dismissed. The Master’s order for a detailed assessment under section 70 of the Solicitors Act 1974 was upheld.

2. Section 70(4) removes the power to order assessment where the application is made more than 12 months after payment of the bill. Payment means payment of the entire sum due. The transfer of £65,000 and retention of £13,000 VAT in the solicitors’ client account did not amount to payment of the whole bill. Money in a client account is not money paid into the solicitor’s own account. Ground 1 therefore failed.

3. The existence of “special circumstances” under section 70(3) is a value judgment. The relevant question is whether, viewed in the aggregate, the circumstances make the case other than a run-of-the-mill case. The Master was entitled to rely on the uncertainty about the costs incurred at settlement, the apparent cap of £65,000, and the respondent’s understanding of whether VAT affected his recovery of damages. The Master’s conclusion was within the generous ambit of discretion. Grounds 2 therefore failed.

4. Delay does not necessarily determine whether special circumstances exist. Once special circumstances are found, delay and consequential prejudice may be relevant to the separate discretion whether to order assessment. Reading the Master’s judgment holistically, he had considered delay and permissibly concluded that it caused no material prejudice. Grounds 3 and 4 failed.

5. The solicitors had not sought security for costs or a VAT-only assessment before the Master. He was not required to take points not argued before him. In any event, the finding of special circumstances was based on VAT and the broader uncertainty about costs, so a VAT-only assessment did not follow. Ground 5 also failed.

   Costs were provisionally to follow the event, subject to detailed assessment if not agreed, with written representations permitted within seven days.

• High Court (Queen’s Bench Division): appeal from the Senior Court Costs Office dismissed. The Master’s order for detailed assessment was upheld.