TRX v Southampton Football Club

A solicitor’s costs are recoverable from an opposing party only where the client is liable to the solicitor under the indemnity principle. Contractual liability is determined objectively from the language, documentary, factual and commercial context, while disregarding subjective intention. In detailed assessment proceedings, CPR 47.20 is the governing code. The receiving party starts with an entitlement to the assessment costs, but the court must consider all the circumstances, including conduct, the reduction in the bill and the reasonableness of items claimed or disputed. Part 36 offers are relevant and may carry substantial weight, but are not necessarily decisive. The assessment is fact-sensitive, and no rigid percentage or costs rule should fetter specialist costs judges.

The Claimant appealed three rulings made by Costs Judge Brown concerning the assessment of costs following acceptance of the Defendant’s Part 36 offer in an abuse claim. The issues were whether the Claimant had a valid retainer with his solicitors before execution of a conditional fee agreement, when that agreement became binding, and whether the receiving party should bear its own costs of the detailed assessment.

The appeal arose from a costs assessment in which the solicitors’ bill had been substantially reduced. The court also considered the relationship between CPR 47.20, the general costs rules and Part 36.

1. Retainer before the CFA. The appeal succeeded on the first issue. Applying the objective principles of contractual construction stated in Lukoil Asia Pacific Pte Limited v Ocean Tankers (Pte) Ltd (Ocean Neptune) and 2 Entertain Video Ltd & Ors v Sony DADC Europe Ltd, the court held that the Claimant was on a general private retainer from 21 June 2019. The references to a no-win no-fee agreement concerned a possible future CFA, to be offered after BBK had reviewed the papers. The standard terms of business therefore governed work done before the CFA was entered into.

2. The Defendant had not rebutted the presumption recognised in Adams v London Improved Motor Coach Builders that, once solicitors act for a client, the client is liable for their costs unless it is shown that there were no circumstances in which the solicitors could look to the client for payment. The relevant question was liability, not whether payment was likely or would actually be sought.

3. Date of the CFA. The court declined to decide whether the CFA became effective when signed by the Claimant or only when signed by both parties, because the hourly rates and material terms did not differ.

4. Detailed assessment costs. CPR 47.20 is the specific governing code, although it draws on CPR 44.2 and incorporates Part 36 with modifications. The listed factors in rule 47.20(3) are examples within the wider requirement to consider all the circumstances.

5. Part 36 offers are relevant and may be given substantial weight. However, the absence of a successful Part 36 offer does not make a different costs order impermissible. The court must also consider conduct, the reduction in the bill and the reasonableness of claiming or disputing particular items. The discretion is fact-sensitive and should not be constrained by rigid rules or a sliding scale.

6. The costs assessment required reconsideration because it had proceeded on the wrong retainer basis. The parties were to agree the appropriate order under rule 47.20 or return to a Costs Judge.

The Claimant appealed three rulings of Costs Judge Brown. Permission had been granted by Saini J. The High Court allowed the appeal on the retainer issue, left the CFA-date issue undecided, and required the costs assessment and consequential costs order to be reconsidered.