David Richardson and 223 Others v Slater & Gordon UK Limited

In Solicitors Act 1974 proceedings, challenges to profit costs and success fees should ordinarily proceed first through the standard process of breakdowns, inspection, points of dispute and replies. An ATE premium is not part of the solicitor’s bill for assessment under section 70. A dispute about commissions or other matters relating to the ATE policy may instead arise when the cash account is determined, if properly particularised. Transfer to the Chancery Division should not be predetermined. The court should first obtain a clear account of the issues and pleadings, then decide whether transfer is appropriate, having regard to proportionality and the overriding objective.

The claimants brought proceedings under section 70 of the Solicitors Act 1974 challenging profit costs and success fees charged by the defendant. Their claims had been stayed pending decisions in related litigation, including Cam Legal Services v Belsner and proceedings led by Edwards. The Edwards proceedings had involved consideration of ATE-policy issues and possible transfer to the Chancery Division, but those claims settled before final determination.

At a directions hearing, the claimants sought early transfer of the commission issue concerning the ATE policy. The defendant sought standard directions for detailed assessment. The central issue was the proper sequencing and forum for the assessment issues and any dispute concerning the cash account.

1. Disposition. Directions were required for the selection of test cases, followed by breakdowns, cash accounts, inspection, points of dispute and replies. A further case management conference was provisionally preferred to fixing the entire timetable.
2. The present proceedings concerned challenges to profit costs and success fees. Those issues should proceed first by the usual detailed-assessment procedure. The court considered that this would limit the scope for evolving arguments and promote proportionate case management.
3. Following Herbert v HH Law [2019] EWCA Civ 527, the quantum of an ATE premium was outside a Solicitors Act assessment. The ATE premium was not included in the bills and could not be challenged through the assessment of those bills.
4. To the extent that a commission issue could properly be raised in these proceedings, it belonged to the determination of the cash account rather than the assessment of the bills. The claimants would need to explain and particularise the positive case said to create a dispute about the cash account.
5. Transfer to the Chancery Division was not predetermined. Once the scope of the pleaded issues was known, the court could decide whether transfer of any issue was appropriate. The court also considered that dealing with the assessment issues first would avoid parallel proceedings and assist the overriding objective.
6. The court’s observation that similar issues might arise in hundreds of other cases was expressly not part of the reasoning for the decision.

This was a first-instance directions decision. The proceedings had previously been stayed pending the Court of Appeal’s decision in Cam Legal Services v Belsner and pending related proceedings led by Edwards. The Edwards proceedings included decisions of Costs Judge Rowley and an appeal judgment of Ritchie J, [2022] EWHC 1091 (QB), but the present judgment concerned the future conduct of the Richardson proceedings.