Michael Glaser KC & Anor v Katharine Jane Atay

A term requiring a consumer to pay the full fee for legal services when the contracted hearing does not proceed is not protected from fairness assessment merely because it relates to the price. The safe harbour concerns the level of remuneration, not an incidental term requiring payment for services not supplied. A grey-list term is not automatically unfair, but must be assessed for detriment, significant imbalance and good faith. Good faith under the Consumer Rights Act 2015 is an objective standard of fair and equitable dealing extending beyond transparency and negotiation. An unfair term is removed without judicial rewriting. Here, frustration discharged the contracts before the next instalment fell due, and neither further contractual payment nor quantum meruit was recoverable.

The appellants, leading and junior counsel instructed under the Public Access scheme, contracted with the respondent for fixed fees covering preparation for and representation at a pre-trial review and a ten-day final hearing. The contracts required the full fees to remain payable if the hearing was adjourned or did not proceed. The final hearing was adjourned, the respondent later disinstructed counsel, and she withheld the remaining fees.

The County Court held the payment term unfair but awarded counsel 70% of the outstanding fees on a quantum meruit basis. On appeal, Turner J held that the term was unfair and that neither the agreed fees nor a quantum meruit was recoverable, ordering repayment of sums paid under the First Contracts: [2023] EWHC 2539 (KB). The central issues were whether the term was assessable and unfair under Part 2 of the Consumer Rights Act 2015, and what contractual or restitutionary consequences followed.

1. Appeal dismissed. The payment term was assessable for fairness. Section 64(1)(b) protects the appropriateness of the price by comparison with the services supplied, not a term making the price payable despite services not being supplied. The term was incidental to, rather than the substance of, the bargain. The approach in Director-General of Fair Trading v First National Bank plc [2001] UKHL 52 supported that conclusion.
2. The term fell within paragraph 5 of Part 1 of Schedule 2, although that conclusion was not necessary because it was assessable in any event. Inclusion in the grey list was indicative only. The term had to be assessed under section 62 for detriment, significant imbalance and good faith.
3. The term placed the entire risk of an ineffective hearing on the consumer, while allowing counsel to retain the full fee and seek other work. That created a significant imbalance to the consumer’s detriment. The assessment was evaluative, and the concurrent findings below were open to the judges.
4. Good faith was an objective requirement of fair and equitable dealing. It was not satisfied merely because the term was clear, disclosed, or accepted after a limited opportunity to raise queries. The client’s lack of legal advice, information asymmetry, vulnerability and counsel’s greater familiarity with litigation risks were relevant. The guidance in Aziz v Caixa d’Estalvis de Catalunya, Tarragona y Manresa (Catalunyacaixa) Case C-415/11 and Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67 was applied.
5. Sections 62(1) and 67 removed the unfair payment term without permitting the court to amend it or substitute a fairer version. The agreed global fees remained fixed, but the contracts were entire obligations rather than divisible contracts. The instalment provisions survived.
6. Adjournment rendered the contracts impossible to perform and discharged them by frustration on 26 August 2020, before the third instalment fell due. Counsel therefore had no contractual entitlement to that instalment. A contractual quantum meruit was unavailable because the contracts fixed the price. The discussion of unjust enrichment, including Barton v Morris [2023] UKSC 3, did not establish any recoverable benefit beyond sums already paid. The observations did not prevent counsel agreeing fairer arrangements for late adjournments.

• County Court at Winchester: HHJ Berkley held the payment term unfair but awarded counsel 70% of the outstanding First Contract fees on a quantum meruit basis.
• High Court, King’s Bench Division: Turner J allowed the respondent’s appeal and dismissed the cross-appeal, holding that the term was unfair and that no contractual or quantum meruit payment was recoverable: [2023] EWHC 2539 (KB), reported at [2024] 1 WLR 1733.
• Court of Appeal (Civil Division): Appeal dismissed. Turner J’s order was upheld in substance.