Rhett St James v Wilkin Chapman LLP

A solicitor-client retainer must be construed as a whole. A client care letter may form part of the contractual package and may qualify inconsistent standard CFA terms, particularly where it gives a specific explanation of the client’s liability.

Where the retainer provides that base costs will be recovered from the opponent, the client is ordinarily not liable for unrecovered base costs, subject to expressly stated exceptions such as small-claims recovery or breach of the client’s obligations.

Under Civil Procedure Rules 1998, a substantial overspend against a costs budget may make costs unusual in amount for the purposes of CPR 46.9(3)(c). If the client was not warned that the costs might not be recovered, the presumption of unreasonableness may arise.

The claimant appealed three decisions made during a solicitor-client costs assessment. The underlying personal injury claim had settled for £65,000, with the defendant solicitor receiving a damages deduction for a success fee.

The first appeal concerned whether the retainer, read with the client care letter, limited the solicitor’s recovery of base costs to sums recovered from the opponent. The other issues concerned a substantial overspend against the approved costs budget and the effect of costs estimates and assurances that the claimant would not have to make further payment.

The defendant brought a cross-appeal concerning permission to amend the points of dispute. The central issues were the proper construction of the retainer, the operation of CPR 46.9(3)(c), and the relevance of estimates and assurances in determining what it was reasonable for the client to pay.

1. Appeal allowed. The claimant was liable only for the agreed success fee of £3,668.71. The cross-appeal was academic in light of that conclusion.
2. The client care letter formed part of the contractual package. Following Jones v Wrexham Borough Council [2008] 1 WLR 1590 and Gavin Edmonson Solicitors Ltd v Haven Insurance Company Limited [2018] UKSC 21, the court had to construe the CFA, client care letter and related documents together. The specific wording of the client care letter prevailed over the broader standard CFA provisions where necessary to give effect to the parties’ objective agreement.
3. The client care letter stated that all base costs would be recovered from the defendant. Properly construed, the qualifications concerning smaller cases and breach of the client’s obligations did not create a general right to recover unrecovered base costs. The arrangement was therefore a CFA-Lite arrangement.
4. A significant overspend against an approved budget does not automatically make costs unusual. Equally, there is no rule that such an overspend can never be unusual. Where the excess is substantial, the budget represents a judicial assessment of reasonable and proportionate expenditure, and the client has not been warned that the excess may be irrecoverable, CPR 46.9(3)(c) may engage the presumption that the costs were unreasonably incurred. Evidence may rebut that presumption.
5. In assessing what it was fair and reasonable for the client to pay, an express assurance that the client would not have to pay the solicitor’s costs could be relied upon without elaborate evidence of reliance. The assurance deprived the client of the opportunity to choose a solicitor offering a true CFA-Lite arrangement and justified limiting recovery to costs recovered from the opponent.

• High Court (King’s Bench Division) — appeals from Costs Judge Rowley’s decisions, including [2023] EWHC 739 (SCCO) and [2023] EWHC 1856 (SCCO). The claimant’s appeal was allowed; the defendant’s cross-appeal was academic.