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 not have to be taxed or considered’. In other words it is no part of the assessment that such costs are taxed or considered. Romer LJ said: ‘When a third party taxes a bill under s. 38 of the Act of 1843, it is clear, both from the wording of the section itself and the authorities, that the taxation must be on the footing of a taxation between the solicitor and the client. But the third party is not for all purposes in connection with the taxation to be treated as if he were himself the client. For instance, when the client has paid the bill, and might not be able to shew special circumstances sufficient to entitle him to have the bill taxed, it does not follow of necessity that the third party is thereby precluded from obtaining taxation.’
A third party asked to pay a solicitors bill is entitled to have extraneous matters excluded. Romer LJ said: ‘Again, the solicitor may have acted for the client in more than one completed matter, and the client may not be entitled as against the solicitor to obtain delivery of a bill and taxation, except on the footing of having all the matters included and taxed. But if the third party be only interested in and liable to pay the costs of one matter, it is clear in my opinion, as a matter of principle, that under s. 38 he can obtain taxation of the bill so far as concerns that one matter only, and on the footing of being liable to pay only the taxed costs of that matter. And that principle really decides this case, and shews that the appeal should fail. For in the present case the third party is a mortgagor, and he is only interested in the relations between the solicitor and his client so far as they concern the position of the client strictly in his character of mortgagee. The mortgagor, therefore, is entitled under s. 38 to have taxation of the solicitors’ bill limited to the items of costs incurred by the client strictly in his position of mortgagee.’
Romer LJ said: ‘It may well be that the client, as between himself and the solicitor, is liable for costs incurred in relation to the mortgaged property with which the mortgagor is not concerned, and for which the mortgagor is not liable. Those will be costs incurred by the mortgagee in his personal capacity so far as concerns the mortgagor, and not costs incurred by him in the capacity of mortgagee strictly and properly considered, and accordingly would not have to be taxed or considered by the taxing master in a taxation by the mortgagor as third party.’
 2 Ch 152
Cited – Tim Martin Interiors Ltd v Akin Gump Llp ChD 17-Nov-2010
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 . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Costs
Updated: 15 May 2022; Ref: scu.426439