Solicitors were not bound to a lower costs figure by a partner’s email to clients promising to ‘honour’ a costs budget, the High Court has ruled.
Claimants in Blyth & Anor v Nelsons Solicitors Ltd had sought to cap the fees owed by them to the Midlands firm for work in a contentious probate dispute, but Mr Justice Stewart, sitting in the Queen’s Bench Division, rejected their appeal and said there was no binding agreement to limit costs.
The parties had agreed a conditional fee agreement in November 2013, which estimated costs of a contested trial to be around £150,000 plus VAT, disbursements and expenses.
The appeal, as well as Master Whalan’s original decision, referred in part to a meeting from June 2014 between the claimants and Nelsons partner Jonathan Roberts, during which they maintained an agreement was reached to cap their costs liability to the sums set out in the budget. The court also heard that Roberts had emailed the claimants saying he would ‘honour’ the original budget. After the probate litigation settled at mediation in March 2015, the firm served the claimants an invoice for £400,000 in costs.
The Master said the claimants had showed a 'fundamental confusion' as to the terms of the alleged funding agreement. They were thus unable to explain accurately or consistently the meaning of 'original budget', flitting between it referring to the estimate cited in the CFA between the parties and the sums set out in a Precedent H form of May 2014.
The Master also concluded that no binding, enforceable contract was concluded orally in June 2014.
Mr Justice Stewart upheld the Master's judgment. As to the word 'honour', Stewart J said in the appeal, this was 'capable of bearing the meaning that the original budget would not be exceeded by fulfilling a previous agreement'.
'It is, however, also capable of the meaning that, apart from the revisions necessary because of the possible increase in trial length, the Precedent H would be respected in the sense that, as the Master said: "the solicitors intended to work within a budget they expected to be adequate".'