Candey Limited v Stephen Finnan
[2023] EWHC 3261 (SCCO)
Global Energy Horizons Corporation v The Winros Partnership
29 February 2024
[2024] EWHC 441 (SCCO)
Senior Courts Costs Office
A company sued its former lawyers over their fees. The judge decided some of the lawyer's claims were fair, while others weren't because they were too late or because the company already paid a large sum upfront. The judge clarified when lawyers can bill clients even if the client ended the contract early.
Key Facts
- •Global Energy Horizons Corporation (Claimant) sued The Winros Partnership (Defendant), its former solicitors, for detailed assessment of bills related to litigation against a former associate (the Gray action).
- •The Defendant acted under three conditional fee agreements (CFAs).
- •The Claimant argued it wasn't liable for any fees due to the CFAs' unenforceability and wrongful termination.
- •A preliminary issues hearing determined the CFAs' enforceability and the Defendant's right to terminate the retainer.
- •An appeal reversed the initial decision, finding the CFAs enforceable and the termination justified by the Claimant's repudiation.
- •The case was remitted for detailed assessment, leading to the current dispute regarding various objections raised by the Claimant.
Legal Principles
Abuse of process occurs when a claim or defence should have been raised in earlier proceedings.
Henderson v Henderson (1843) 3 Hare 100; Johnson v Gore Wood [2002] 2 AC 1
In solicitor-client assessments, liability is usually determined as a preliminary issue before detailed assessment.
Civil Procedure 2023 at 67.2.1
A solicitor who terminates an entire contract for good cause is entitled to payment for work done.
Richard Buxton v Mills-Owen [2010] 1 WLR 1997; Vansandau v Browne (1832) 9 Bing 402
Under a conditional fee agreement, if there's no accrued right to payment at termination, the solicitor may not be entitled to a bill for work done.
Howes Percival LLP v Page [2013] EWHC 4104 (Ch)
CPR 46.9 presumptions regarding reasonableness of costs require informed approval by the client.
CPR 46.9; Herbert v HH Law Ltd [2019] EWCA Civ 527
Outcomes
Objection 1 (assessment at nil due to lack of liability at bill delivery) was not an abuse of process.
While the objection could have been raised earlier, the unusual procedural history and delays justified its late raising. The Claimant's argument that the conditionality of payment under the CFA negates the solicitor's right to payment upon repudiation by the client was considered and upheld.
The Defendant is entitled to payment for work between December 2012 and March 2013 under CFA 2.
CFA 2 hadn't concluded when CFA 3 began; a subsequent client care letter didn't terminate CFA 2.
The Claimant is liable under CFA 2 for basic charges for work outside CFA 1's scope but not for success fees.
While retrospective CFAs are common, there was no informed approval of success fees for this work, triggering a presumption of unreasonableness under CPR 46.9(3)(c).
The 5% postponement success fees under CFA 1 and CFA 2 are unreasonable and disallowed.
The substantial advance payments made the deferment fees effectively duplicate payment; this lack of clear explanation renders them unreasonable.