Toms (t/a Goldbergs Solicitors) v Brannan

A signed conditional fee agreement may bind the client even where its terms were not fully understood, subject to recognised exceptions such as misrepresentation. However, enforceability of the agreement is distinct from the contractual entitlement to particular fees. Where the solicitor terminates the agreement because the client has not breached his responsibilities, the applicable contractual provision may permit recovery only of expenses and disbursements, not basic professional charges. The court must identify which termination provision applies and construe the agreement accordingly. A claim for professional fees therefore fails where the agreement, on the facts found, permits recovery only of expenses and disbursements.

The claimant solicitor appealed from an order of the Plymouth County Court, following a fast-track trial, dismissing his claim for £12,600 in professional fees under a conditional fee agreement with the defendant client. The agreement had been signed in March 2015. Proceedings against a third party were not authorised before limitation expired in July 2017, after which the claimant terminated the agreement.

The county court found that the defendant was not in breach of the agreement and dismissed the claimant’s claim. The appeal concerned whether that conclusion was legally correct, including whether the signed agreement bound the defendant and whether its terms entitled the claimant to recover professional charges.

1. Appeal dismissed. The county court’s findings of fact were within the scope of the appeal and could not be challenged. The appeal therefore proceeded on the basis that the defendant had not breached the conditional fee agreement.
2. The judge considered the ordinary rule in L’Estrange v F Graucob [1934] 2 KB 394, namely that a person who signs a contractual document is generally bound by it where there has been no misrepresentation. The conditional fee agreement contained no unusual or inappropriate terms, and no recognised exception to that rule appeared to apply. Nevertheless, the decision under appeal was not properly understood as holding that the agreement was non-binding.
3. The agreement contained separate provisions governing the financial consequences of termination. If the client failed to comply with his responsibilities, the solicitor could seek basic charges, expenses and disbursements. If the solicitor ended the agreement because the claim was unlikely to succeed, the solicitor could recover expenses and disbursements, but not basic charges.
4. Reading the county court’s concluding findings together with the agreement, the defendant had not failed to comply with his responsibilities. The claimant’s termination consequently fell within the latter provision. The claimant was entitled, at most, to expenses and disbursements.
5. The claim was for professional fees, which were basic charges rather than expenses or disbursements. The county court’s findings therefore were fatal to the claim and supported dismissal, even though the reasoning was better characterised as a finding that the fees were not recoverable under the agreement rather than that the agreement was not binding.
6. The claimant was ordered to pay the respondent’s appeal costs, summarily assessed at £5,000 on the standard basis.

• Plymouth County Court: HHJ Mitchell dismissed the solicitor’s claim for professional fees and ordered him to pay 90% of the action’s costs by order dated 28 August 2018.
• High Court (Queen’s Bench Division): The appeal was dismissed. The claimant was ordered to pay the respondent’s appeal costs, summarily assessed at £5,000.