Ashley Holcroft v Thorneycroft Solicitors Limited

An agreement between solicitor and client may compromise the amount of costs and prevent assessment under section 70 of the Solicitors Act 1974. The court must determine the agreement’s objective meaning from its language and context. Express words excluding assessment are not essential, but any alleged surrender of the client’s statutory right requires careful scrutiny. The relevant question is whether the parties agreed the division of a settlement sum, or merely agreed an hourly rate, an assessment outcome, an upper limit, or a non-contentious business remuneration agreement. Where the agreement fixes the sum to be retained by the solicitor and the sum payable to the client, the client cannot later use section 70 to reopen that allocation.

The respondent solicitors acted for the appellant in a personal injury claim. Before proceedings were issued, the appellant authorised acceptance of a £24,200 settlement offer, which included specified profit costs, VAT and disbursements and left £9,865 payable to him. The respondent later delivered a bill. The appellant applied for assessment under section 70(1) of the Solicitors Act 1974.

The District Judge held that the August 2020 exchanges formed a binding agreement preventing assessment and struck out the claim. The appeal concerned whether those exchanges were a compromise of costs, a non-contentious business agreement, or an agreement leaving assessment available.

1. Appeal dismissed. The District Judge was entitled to conclude that the August 2020 exchanges formed a binding agreement as to the precise amount of the respondent’s costs and disbursements.
2. The personal injury claim had settled before proceedings were issued and was therefore non-contentious business for the purposes of the Solicitors Act 1974, following the effect attributed to Belsner v CAM Legal Services Ltd [2022] EWCA Civ 1387. A non-contentious business agreement would not itself prevent assessment, although the solicitor could rely on it under section 57.
3. The court’s section 70 jurisdiction includes determining the legal status and effect of an agreement and whether it prevents assessment, as explained in Jones v Richard Slade & Co [2023] EWHC 1968 (KB). A solicitor and client may also make an agreement standing independently as a compromise of existing rights, as illustrated by Walton v Egan [1982] 1 QB 1232.
4. The August agreement was to be construed objectively. The public importance of access to assessment meant that any agreement said to exclude that right required careful scrutiny, but no particular express formula was required. Relevant matters included the fixed amount payable to the client, the absence of any reservation of assessment rights, the client’s knowledge of the retainer, and the context in which the settlement sum was divided.
5. The agreement concerned the whole division of the £24,200 settlement sum, not merely remuneration under section 57. The appellant accepted £9,865, the balance being used for disbursements and the respondent’s costs. He could not invoke section 70 to reopen that agreement.

• High Court (King’s Bench Division): Mr Justice Eyre granted permission for the appeal but dismissed it, upholding the District Judge’s preliminary decision that the section 70 procedure was unavailable.
• Sheffield District Registry: District Judge Batchelor held on 19 September 2023 that the parties had entered into a binding agreement precluding assessment and struck out the claim.