Elinor Gorenstein v Sears Tooth Solicitors

Section 74(3) of the Solicitors Act 1974 does not apply to costs incurred in family court proceedings. Work in separate county court proceedings does not bring related family work within the subsection.

A written retainer may permit recovery of solicitor-and-client costs exceeding sums recoverable from an opponent if it clearly explains the client’s primary liability and the limited circumstances in which a costs contribution may be obtained. Costs identified as unusual in amount require item-by-item assessment. Estimates are not ordinarily caps, and estimated time should not be struck out automatically. Both matters must be assessed in context, including the parties’ conduct and explanations given when estimates are exceeded.

The claimant instructed the defendant solicitors in children and financial remedy proceedings in the Family Court. She challenged the detailed bill, seeking substantial reductions at preliminary points.

The principal issues were whether section 74(3) of the Solicitors Act 1974 applied, whether the retainers satisfied CPR 46.9(2), whether specified categories of work were unusually incurred, whether costs estimates operated as caps or should influence the assessment, and whether estimated time should be disallowed.

The judgment determined these preliminary issues and directed that the detailed assessment continue on a line-by-line basis.

1. Section 74(3). Section 74(3) of the Solicitors Act 1974 applies to items relating to proceedings in the county court. The disputed work concerned children and financial remedy proceedings in the Family Court, so the subsection was not engaged. Any divorce work in the county court was separate and was not within the invoices under assessment. The level of court for each body of work is a question of fact (paras [136]-[152], [200]-[203]).
2. Retainer. Even if section 74(3) had applied, the retainers satisfied CPR 46.9(2). They explained that the claimant would ordinarily bear her own costs, identified limited circumstances in which an opponent might be ordered to contribute, specified chargeable work and fee earners, and promised regular costs updates. The claimant therefore remained primarily liable for the solicitors’ charges, rather than being liable only for a shortfall after recovery from her opponent (paras [153]-[165], [187]-[198]).
3. Incoming correspondence, non-fee-earning expenses and dual attendances were not unusual in nature where the retainer disclosed or permitted such charges. That did not determine whether particular items were unusual in amount or reasonable. Those questions remained for the detailed assessment (paras [167]-[177], [204]-[208]).
4. Later costs correspondence reflected the developing litigation and did not retrospectively invalidate the retainers. Estimates had to be taken into account in context, including reliance, explanations for increases and the parties’ conduct, but they were not fixed-fee caps. The assessment therefore remained one of reasonableness (paras [178]-[186], [210]-[219]).
5. It would be inappropriate to strike out all estimated time automatically. The estimated entries were to be examined line by line against the work actually done and the surrounding evidence (paras [220]-[221]).
6. The reasoning in Lynch v Paul Davidson Taylor (a firm) was highly instructive and persuasive. A solicitor-and-client assessment was not to be converted into a hypothetical party-and-party assessment merely because no inter partes assessment had occurred (paras [187]-[190]).