A litigation client has been made liable for costs to her former solicitors after refusing to accept advice to make a reasonable offer to her opponent.
London law firm Bankside Commercial had cancelled its retainer after the client, a commercial agent, did not accept its advice to make an ‘urgent and realistic’ counter-offer of around £77,000 plus 50% costs to conclude a dispute.
The firm and client had entered a conditional fee agreement which stipulated the firm would still be paid basic charges and its success fee even if the arrangement ended, because the client had rejected an opinion about making a settlement.
After the client went on without taking her solicitors’ advice, she was awarded just £40,636 at arbitration. In a subsequent hearing, a Master assessed the firm’s costs, recoverable under the terms of the retainer, at around £239,000. The client disputed her liability and has declined to the pay the firm.
On appeal in Butler v Bankside Commercial Ltd, The Honourable Mr Justice Turner rejected the former client’s assertion that advice about making an offer was not the same as advice about ‘making a settlement’.
Instead the judge accepted the firm’s argument that the Master was correct to apply a broader interpretation to the scope of the CFA clause and that the client’s narrow interpretation was wrong.
Turner J said the firm had ‘clearly and unambiguously’ set out its opinion about making a settlement with their client’s opponent, and that opinion had been rejected.
The judge said it was wrong to limit the clause to the consideration of offers made by the opponent, noting this would lead to ‘procedural distinctions devoid of either logical justification or practical coherence’. He added: ‘Where there is a CFA under which the solicitors, themselves, face significant economic risks in the event of an adverse result at trial, one would not expect the level of protection which they are afforded against the whims of the unreasonably optimistic client to turn upon the random happenstance of whether or not the other side has made an approach which can be categorised as a contractual offer capable of acceptance.
‘For such solicitors to be required to wait, like Vladimir and Estragon, for an offer from the other side which might never come rather than, where appropriate, to take the initiative in negotiations would impose artificial and unjustifiable limits on their ability to protect their own legitimate interests.’ (Vladimir and Estragon, from the play Waiting for Godot by Samuel Beckett, wait for the arrival of someone named Godot who never arrives.)
Turner J concluded the Master was ‘entirely right’ in his interpretation of the CFA and that the client had no real prospect of defending the claim.