Written retainers with hourly rate 'could be CBAs', Court of Appeal hears

If a solicitor’s written retainer states an hourly rate it is a contentious business agreement – and thus provides 'specific protections' for a client - the Court of Appeal has heard in an appeal over outstanding fees.

Emily Barnes instructed international firm Broadfield UK, then BDB Pitmans LLP, in relation to her divorce in 2018. The firm, which says £99,998.40 plus interest has remained outstanding since 2019, commenced proceedings for £75,000 plus interest of £24,999.99. Barnes argued that the retainer was a CBA and that the firm’s claim was abusive.

A tribunal judge found the retainer was not a CBA because it lacked certainty. A subsequent appeal was dismissed. Barnes was granted permission to go to the Court of Appeal.

In written submissions in Barnes v BDB Pitmans LLP, the firm described as a ‘surprising position’ Barnes’ take that the retainer was a CBA.

Robin Dunne, for Barnes, said: ‘This appeal concerns specifically whether the retainer in this case was a contentious business agreement. We say that solicitors have multiple options for making agreements with their clients, they can choose to enter into retainers of different types. They can agree oral retainers and put nothing down in writing, no restriction on that in terms of the law. There may be regulatory issues with it but those are valid retainers.

‘What we say is if the solicitor enters into a written agreement which provides for remuneration by way of hourly rate and binds the parties to this, that will be an hourly rate CBA and that will comply with section 59 of the [Solicitors] Act and once it complies with section 59, it is a CBA.’

Dunne added: ‘The question of whether it is fair or reasonable or what benefits there are to client or solicitor are not wholly relevant to what the act says and where these retainers sit within the [Solicitors Act 1974].’

In written submissions, Dunne said the authority relied on by both the tribunal and circuit judge ‘is no longer good law and should not have been followed’.

He added: ‘The courts below…fell into error conceptually by accepting the argument that there are two different regimes which govern written retainers with clients in contentious business, one under s.59 of the Act relating to CBAs and another, unspecified regime, not set out anywhere within the Act which deals with the client’s rights to an assessment where a written retainer is signed which is not a CBA. There are no separate regimes at all where a CBA includes remuneration by hourly rates.’

Jake Coleman, for Pitmans, said in his written submissions that the appeal should be dismissed as ‘clients must know with certainty "what they are letting themselves in for" before agreeing to restrict their valuable right to an assessment’.

He added that the retainer ‘plainly lacks the certainty required to constitute a CBA’ as within the firm’s client care letter to Barnes its hourly rates were not fixed but given as a range of hourly rates, the firm had the right to increase the hourly rates without her agreement, and it stated ‘fees may be calculated in accordance with other factors’.

Judgment was reserved.

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