Michael Glaser KC & Anor v Katharine Jane Atay

A contractual term requiring a consumer to pay the full fee in advance, including for services not supplied if the hearing does not proceed, may fall within paragraph 5 of Part 1 of Schedule 2 to the Consumer Rights Act 2015. Its classification as a debt rather than damages does not determine the issue; the practical effect of the term is decisive.

Such a term is not protected by the statutory safe harbour merely because it relates to price. The agreed level of remuneration may remain protected, while provisions governing payment timing and payment for unperformed services remain assessable for fairness. If the term is unfair, it is removed in its entirety. The court cannot replace an entire contractual obligation with a quantum meruit award merely to compensate the trader for anticipated work or diary commitments.

The claimants, two barristers, sued their former public-access client for unpaid fees under written retainers relating to preparation for and representation at a financial remedy trial. The trial was adjourned before the bulk of the fees became payable, and the defendant declined to make further payments.

The County Court held that the payment term was unfair under the Consumer Rights Act 2015, but awarded the claimants 70% of the contractual sum on a quantum meruit basis. The defendant appealed and the claimants cross-appealed. The central issues were whether the Act applied to the payment term, whether the term was within the statutory safe harbour, and whether any non-contractual payment could be awarded.

1. Appeal allowed. The payment term fell within paragraph 5 of Part 1 of Schedule 2 to the Consumer Rights Act 2015. It had the effect of requiring payment of a disproportionately high sum for services not supplied if the consumer decided not to perform the contract. The analysis turned on practical effect, rather than the common-law classification of the liability as a debt or damages.
2. Alternatively, the payment term was outside both safe-harbour categories in section 64. The agreed fee and the scope of the work formed the core bargain and could not be challenged merely as to price. The timing of payment and the consequence of the trial not proceeding were ancillary matters and remained subject to fairness assessment.
3. The term was unfair under section 62. It created a significant imbalance to the consumer’s detriment. The barristers could receive the full fee substantially in advance, retain the ability to undertake alternative work, and pay nothing by way of reimbursement even if no work was performed. The term had not been individually negotiated, and the professional risks were more familiar to the barristers than to the lay client. Transparency alone did not establish good faith.
4. Under section 62(1), the payment term was not binding and had to be treated as if the whole term had never existed. The agreed fee and scope of work remained, but the contract required an entire performance including attendance at the trial. Once the trial was adjourned, the claimants had no contractual right to the agreed price.
5. A quantum meruit award was unavailable. The parties had agreed the scale of remuneration and had not made the contract divisible. The court could not add a pro rata payment term or otherwise revise the unfair term. In any event, the lower court’s 70% assessment relied on impermissible considerations and insufficiently addressed any benefit conferred on the defendant. The claim for the fees subject to the appeal was dismissed.

• High Court (King’s Bench Division): appeal and cross-appeal from the decision of His Honour Judge Berkley in Winchester County Court dated 6 December 2022. The appeal was allowed and the claim for the fees subject to the appeal was dismissed.