The company borrowed money from a bank, who instructed the defendants to act in the loan. On recovering the loan, the borrowers challenged the amounts charged by the solicitors. The court was asked what were the powers for a third party paying a solicitor’s bill to challenge the amount, and how any reduction might be applied.
Held: In considering the effect of an extraneous agreement entitling a client to pass on costs, the court is not determining how much the client is liable to pay under his retainer with the solicitor; but which items of the bill can be passed on to the third party. The costs master had incorrectly confused two questions, the assessment of the bill and the identification of which items in it were payable by the third party.
CPR 48.3 allows the court to assess the costs payable under a contract. But CPR 48.3 (2) excludes a contract between a solicitor and his client, and the parties to an assessment under CPR 48.3 will be the parties to the contract in question; and that section 71 (as to the contract of retainer between solicitor and client) is not a substitute for an assessment under CPR 48.2. The Bank (or its assignees) should have been parties to the assessment of how much the Bank was entitled to pass on to TMIL, but were not. There was no objection to an assessment under section 71 and an assessment under CPR 48.3 from taking place simultaneously, provided that the costs judge recognises that the two assessments are conceptually distinct.
Lewison J
[2010] EWHC 2951 (Ch)
Bailii
Solicitors Act 1974 70, Civil Procedure Rules 48.3
England and Wales
Citing:
Cited – In re Gray 1901
The tenant of a mine was liable to pay the landlord’s costs of the grant of the lease. The tenant’s liability was based on custom, which required the tenant to pay the costs of drawing, settling and completing the lease. The tenant asked for an . .
Cited – In Re Longbotham and Sons CA 1904
The borrower had agreed to pay the lender’s solicitors bill, but challenged it saying that it included elements for personal work.
Held: The personal items were excluded. Costs which are outside the scope of the third party’s liability ‘would . .
Cited – Re Cohen and Cohen CA 1905
Mrs Cotton sued Mr Edwardes for breach of contract; and he claimed against her as to the ownership of a song. Mrs Cotton authorised her solicitors to incur liabilities for unusual expenses, including the employment of leading and junior counsel to . .
Cited – Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) CA 1993
A clause entitling a mortgagee to recover legal costs from the mortgagor did not extend to costs that were unreasonably incurred or which were unreasonable in amount. Whether costs were unreasonably incurred or were unreasonable in amount was to be . .
Cited – Re Hirst and Capes 1908
If there is an admitted agreement for payment of a solicitor’s costs by a third party, and the only question is its true construction, then the costs judge is entitled to decide the question of construction as part of the process of assessment . .
Cited – Re Cohen and Cohen CA 1905
Mrs Cotton sued Mr Edwardes for breach of contract; and he claimed against her as to the ownership of a song. Mrs Cotton authorised her solicitors to incur liabilities for unusual expenses, including the employment of leading and junior counsel to . .
Cited – Reynolds v Stone Rowe Brewer (A Firm) QBD 18-Mar-2008
The solicitors appealed against the assessment of their costs. The judge had found that they had estimated their costs and applied a 15% margin of error.
Held: the judge should have given reasons for his judgment to allow the parties to assess . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Costs
Updated: 09 November 2021; Ref: scu.426064