Belsner v Cam Legal Services Ltd

A solicitor cannot rely on Civil Procedure Rules r 46.9(2) merely by producing a signed retainer permitting recovery above inter-party costs. Because the solicitor-client relationship is fiduciary, the solicitor must prove informed consent and sufficient disclosure. Disclosure is fact-sensitive. It must include information that may affect consent, taking account of the client’s sophistication, the likely overall cost and the likely recoverable costs. General warnings that the client may pay a shortfall may be inadequate where the solicitor’s estimate greatly exceeds the fixed costs likely to be recovered. A specific, realistic indication of the disparity may then be required. Without it, Solicitors Act 1974 s 74(3) continues to limit the assessment.

The claimant instructed the defendant under a conditional fee agreement to pursue a low-value road traffic accident claim. The claim settled under the Pre-Action Protocol for £1,916.98 in damages, together with fixed costs and disbursements. The claimant later sought assessment of the defendant’s bill under the Solicitors Act 1974.

District Judge Bellamy held that the written retainer expressly permitted recovery of costs exceeding those recoverable from the opposing party under Civil Procedure Rules r 46.9(2), and assessed the bill at £3,104.15. The claimant appealed, arguing that informed consent was required and had not been given. The defendant separately appealed the costs order, but the central issue before the High Court was whether the defendant had made sufficient disclosure to obtain informed consent.

1. Disposition. The claimant’s appeal was allowed. The defendant’s appeal was not decided because it was rendered otiose by the result.
2. Section 74(3) of the Solicitors Act 1974 limits the amount allowed on assessment to the amount recoverable between the parties, unless a rule of court provides otherwise. Rule 46.9(2) provides an exception where solicitor and client have entered into a written agreement expressly permitting payment above that amount.
3. A written agreement for this purpose must be valid and enforceable. Because the solicitor-client relationship is fiduciary, the solicitor must also prove that the client gave informed consent to the provision permitting payment above inter-party costs. The solicitor bears the burden of showing that sufficient disclosure was made.
4. Sufficiency of disclosure is fact-sensitive. The relevant question is whether the information may have affected the client’s consent. Relevant considerations include the client’s sophistication, the solicitor’s professional obligation to provide the best possible information about the likely overall cost, and the relationship between the solicitor’s estimated charges and the costs likely to be recovered.
5. The defendant gave only general warnings that the claimant might recover part or all, some, or a proportion of the costs. It did not explain that its estimated basic charges of £2,500 plus VAT might be met by recovery of only £500 or £550 plus VAT if the claim settled at the expected stage. That disparity was sufficiently striking to require specific disclosure. The general wording did not amount to informed consent.
6. The comparison with MacDougall v Boote Edgar Esterkin [2001] 1 Costs LR 118 and Herbert v HH Law Ltd [2019] 1 WLR 4253 supported the importance of informed approval, but Herbert was materially different because the solicitor there had capped the client’s liability and the Court of Appeal had not considered the issue under rule 46.9(2). The defendant therefore could not rely on the written agreement.

1. High Court (Queen's Bench Division): Allowed the claimant’s appeal against District Judge Bellamy’s assessment decision. The defendant’s appeal concerning costs was not determined.
2. Sheffield District Registry, High Court: On 14 August 2019, District Judge Bellamy assessed the bill at £3,104.15 and ordered the defendant to pay the claimant’s costs of the assessment.