Paul Evans v Acuity Law Limited

In a solicitor-client assessment, a costs estimate is not ordinarily a cap. Its effect depends on the retainer, the defined scope of work and any provision for further work at ordinary hourly rates.

Costs will not be treated as unusual and unreasonably incurred merely because they exceed an estimate or may not be recoverable from the opposing party. The court must consider the client’s express or implied approval, involvement in the relevant decisions, and the warnings and explanations given about costs and risks.

Where disclosure is materially duplicated or corrupted so that the receiving party cannot formulate adequate line-by-line objections, the assessment may require revised disclosure and supplementary points of dispute and reply.

This was a preliminary issues hearing in a solicitor-client detailed assessment between Mr Paul Evans and Acuity Law Limited.

The unresolved issues concerned two matters. They included the effect of costs estimates, whether costs were unusual and unreasonably incurred under Civil Procedure Rules 1998 CPR 46.9(3)(c), and whether the retainer had been terminated without reasonable notice. The court also considered whether the electronic disclosure was sufficiently reliable and organised for a line-by-line assessment.

The court had to determine whether the challenged costs were capped by the estimates, whether the client had given informed consent to further work and the instruction of leading counsel, and whether the assessment could proceed on the existing disclosure.

1. Disclosure. The electronic disclosure contained substantial duplication and had corrupted document dates. The Claimant was therefore not yet in a position to formulate adequate line-by-line objections. The Defendant was directed to resubmit disclosure in a de-duplicated format preserving original dates, after which supplementary points of dispute and reply could be served. A further hearing could then be requested.
2. Matter 2 estimates. The retainer clearly identified stages of work but also provided that further work would be charged at usual hourly rates unless separately agreed. Stage one was engaged and stage two was substantially engaged, even though no injunction application was filed. Work concerning the Rolex watch reasonably fell within further work. The estimate did not operate as a cap, and charges of £5,600 plus VAT were not shown to be unusual in nature or amount. The court also found express or implied client approval, while leaving open objections to reasonableness of amount.
3. Matter 3 and informed consent. The estimate of up to £3,000 plus VAT related to the initial stage. The oral review involved further work. The communications showed repeated warnings that junior counsel was sufficient, that leading counsel involved significant cost, and that the review carried substantial risks, including the 20% threshold and the opposing party’s Part 36 offer. The Claimant nevertheless expressly approved leading counsel and pursued the review. The associated costs were therefore reasonably incurred, subject to arguments on their amount.
4. Unusual costs. Under Civil Procedure Rules 1998 CPR 46.9(3)(c), the Claimant did not establish that the Matter 3 costs were unusual so as to be unreasonably incurred. The court considered the scope of the retainer, the Claimant’s substantial involvement, the warnings given, and his express or implied consent. Non-recovery from the opposing party did not itself make the solicitor-client costs unusual.
5. Termination. The termination challenge was not made out. The Claimant was already engaging Kain Knight and counsel before the relisted hearing, and the circumstances did not show that he had been left without practical representation.

The assessment was therefore continued subject to the disclosure and pleading directions.