Clare Griffin v Kleyman & Co Solicitors Ltd

On a solicitor-client assessment under section 70 of the Solicitors Act 1974, the one-fifth rule ordinarily determines liability for the assessment costs. A settlement offer may constitute a special circumstance justifying a different order, but it must be clear, realistic, timely and properly framed. An offer which seeks to obtain the costs consequences of CPR Part 36, where Part 36 does not apply, is not a proper or realistic means of displacing section 70(9). The court may nevertheless reduce the successful solicitor’s recoverable assessment costs to reflect negligent overbilling, poor record keeping and conduct which impeded resolution. Costs of a separate Part 8 application are governed by CPR 44.2, although they may sensibly be aligned with the assessment costs.

The claimant sought an assessment under section 70 of the Solicitors Act 1974 of bills rendered by the defendant solicitor between March 2020 and May 2021. The assessment order was made by consent after the defendant initially opposed the claimant’s Part 8 application. The bills were reduced by 15.34 per cent, below the statutory one-fifth threshold, and the claimant became entitled to a billing refund.

The court had to decide whether the claimant’s settlement offer constituted special circumstances displacing the statutory allocation of assessment costs, how the parties’ conduct affected the award, and how the costs of the separate Part 8 proceedings should be dealt with.

1. Assessment costs. Section 70(9) of the Solicitors Act 1974 required the defendant to receive the costs of the assessment because the bills had been reduced by less than one fifth, subject to any special circumstances under section 70(10).
2. Settlement offers. Following Angel Airlines SA v Dean & Dean [2008] EWHC 1513 (QB), a clear offer made in proper time and proper form may constitute a special circumstance. The principle identified in Wills v Crown Estate Commissioners [2003] 4 Costs LR 581, that realistic offers should be made at the beginning of detailed assessment proceedings, applied equally to solicitor-client assessments.
3. The claimant’s offer of 23 May 2022 did not qualify. It proposed a reduction of less than one fifth, sought to impose the costs consequences of CPR Part 36, and required the defendant to pay the claimant’s costs. Part 36 did not apply to a section 70 assessment. The offer was therefore misconceived and unrealistic, and did not establish special circumstances. The court applied its reasoning in Zuhri v Vardags Ltd [2023] EWHC 3050 (SCCO), concerning the inconsistency between Part 36 costs provisions and section 70(9) and (10).
4. The defendant’s negligent overbilling and inadequate accounting records impeded the clarification and resolution of the assessment. The defendant was therefore awarded 80 per cent, rather than 100 per cent, of its assessment costs.
5. Part 8 costs. The Part 8 application was a separate process governed by CPR 44.2, although it formed part of the claimant’s overall attempt to reduce the bills. The defendant’s delayed consent to the assessment order justified awarding it only half of its Part 8 costs.