A ruling that City firm Withers be bound by a costs estimate for a four-day trial in a case where the trial ended up four times as long has emphasised the need for firms to keep estimates updated, solicitors said this week.


Ruling on a preliminary issue in MasterCigars Direct Ltd v Withers, Master Rogers found that Withers had failed to comply with the Law Society's Client Care Code by not warning its client that costs were escalating well above the estimate.



He rejected a Withers submission that because its client was an experienced businessman who was in regular everyday contact with his solicitors, there was a duty on him to ask for an updated estimate.



The firm's estimate for the substantive action included a four-day trial. The trial eventually lasted 18 days, or at least came before the court on 18 separate days, and across the whole matter Withers rendered 21 bills for almost £1.1 million in total. An order for detailed assessment has been made in respect of 16 of them. MasterCigars has already conceded some exceptions to the estimate, such as counsel's fees for the extra trial days, yet considers that Withers' bill should be substantially lower because of the estimate.



Master Rogers criticised Withers for not, by and large, supporting its contentions with contemporaneous attendance notes.



Andrew Ottley, a partner in the risk management team at City firm Ince & Co, said: 'This decision shows that solicitors cannot safely regard costs estimates as merely a provisional indication of costs, but rather that the Supreme Court Costs Office is ready to treat such estimates as contractually agreed caps on the solicitor's entitlement.' Clients must be given the chance to revise their cost-benefit analysis if circumstances change, he added.



Speaking recently to the Gazette's sister publication, Litigation Funding, the Master of the Rolls, Sir Anthony Clarke, said he wanted the courts to take greater control of costs issues such as estimates.



A Withers statement said: 'Withers' costs are currently under assessment by the court and, until determined, it is wholly inappropriate to comment. The figure of £1 million relates to the total fees, including counsel and other third-party disbursements for a substantial piece of litigation in which Withers were retained for in excess of two years. The assessment concerns only some of the bills. The estimate referred to related only to a short period out of the total of the retainer.'



Neil Rose