HD & Ors v North Devon Healthcare Trust & Ors

A solicitor’s retainer to conduct litigation may be an entire contract that includes the work needed to agree or assess recoverable costs. Where the solicitor repudiates that retainer and cannot complete the agreed work, it may be unenforceable against the client. Costs for which the client has no liability cannot be recovered from the opposing party under the indemnity principle.

Prolonged, unexplained inactivity may support an inference that proceedings have been deliberately abandoned and may amount to an abuse of process. The court must first decide whether there has been an abuse, then whether strike-out is a proportionate response. It may also order a solicitor to pay costs caused by unreasonable or improper conduct, and may award indemnity costs where the conduct takes the case outside the norm.

The defendants applied in six linked detailed assessments arising from compromised claims concerning alleged failures in the consent process for synthetic mesh treatment. The claimants’ former solicitor, Darren Hanison, had been struck off after the Solicitors Regulation Authority intervened in his practice. The assessments had not progressed after preliminary-issue hearings in 2022 and 2023, and neither the claimants nor Mr Hanison appeared at the hearing of the application.

The defendants sought declarations that the retainers were unenforceable, strike-out of the six assessments, repayment of payments on account, unless orders for other claimants represented by Mr Hanison, and costs orders against him. The central questions were whether the retainers had been terminated and were enforceable, whether the inactivity amounted to abuse of process, and whether Mr Hanison should personally pay costs.

1. The retainers had been terminated by Mr Hanison without good reason. His prolonged failure to act, with no credible explanation and no client conduct justifying termination, was a repudiatory breach which the claimants accepted by ceasing to instruct him. The retainer for HD expressly covered negotiations about costs and any court assessment. The court treated assessment of recoverable costs as part of the solicitor’s contractual obligations, applying the entire-contract principle in Re Underwood & Piper v Lewis [1894] 2 QB 306. As Mr Hanison had no prospect of completing those obligations, the retainers were unenforceable by him against the claimants.

2. Because the claimants had no liability to Mr Hanison for costs under the unenforceable retainers, they could recover none of those costs from the defendants under the indemnity principle. The six detailed assessments were therefore struck out; alternatively, the bills could be assessed at nil.

3. On abuse of process, the court followed the two-stage approach in Asturion Fondation v Alibrahim [2020] EWCA Civ 32: first decide whether the claimant’s conduct was abusive, then decide whether strike-out is an appropriate exercise of discretion. The court inferred deliberate dormancy from the extensive, wholly unexplained inactivity. It considered the integrity of the court’s processes, the lack of any realistic prospect of continuing the assessments, and the uncertainty and prejudice to the defendants. Although strike-out is a last resort, immediate strike-out was proportionate; a further unless order would serve no useful purpose.

4. For the other claimants in the cohort, the court exercised its discretion under CPR Part 47.8 to order them to commence detailed assessment proceedings within 28 days, failing which their costs would be disallowed.

5. Under CPR Part 44.11, Mr Hanison’s failure to lodge the necessary papers, unreasonable claims for costs, and abandonment of the assessments breached his duties to the court and had no reasonable explanation. He was ordered to pay the costs of the abortive November 2022 hearing and the detailed assessments. The earlier order requiring the claimants to pay the costs of that hearing remained distinct. Applying the requirement that conduct take the case outside the norm, the court ordered indemnity costs for those proceedings and for the defendants’ application. The defendants’ solicitor also gave undertakings not to pursue the claimants personally for the relevant costs.

Not an appeal. The judgment records earlier case-management and preliminary-issue orders by Costs Judge James but gives no appellate citation or appeal history.