Funding agreements drawn up by solicitors and described as ‘prolix and opaque’ have been deemed unenforceable by the senior courts costs office.
In Anthony v Collins Deputy Master Friston said the claimant’s solicitors had created a ‘contractual quagmire in which even they lost their way’.
He added: ‘I have no doubt that there are dozens, if not scores, of ambiguous and inconsistent terms in the retainer documentation that would take days to disentangle. Indeed, the retainer documentation could be likened to a hydra.’
Nevertheless, he did not find that the agreement drawn up by claimant solicitors was voided by uncertainty. Instead, the deputy master said the original bill of costs was miscertified because it stated the work had been carried out under a private client retainer. This conduct was not just unreasonable but also improper, it was ruled, and indicated an ‘unacceptably lax attitude’ towards certification.
As such, the judge concluded that the claimant had entered into an unwritten conditional fee agreement and that his costs were claimed in breach of the indemnity principle and effectively unenforceable.
The claimant, a self-employed taxi driver, had instructed London-based Contested Wills and Probate Lawyers Limited to make a claim in relation to his late father’s legacy. Three conditional fee agreements were drawn up before the parties reached a compromise and the defendant agreed to pay costs on the indemnity basis. A month later the claimant served a bill of costs for almost £57,000, describing the contractual arrangements between claimant and solicitors – wrongly as it transpired – as a private retainer.
The parties exchanged correspondence over the subsequent months, with the defendant repeatedly asking for clarification of the funding arrangements, and the claimant’s solicitors accusing the defendant of a ‘fishing expedition’. In turn the defendant accused the claimant solicitors of misconduct and moved to a detailed assessment hearing.
Friston said that the first agreement ran to 67 pages long and also included a 48-page ‘disclosure kit’. He noted that requests for the claimant to read it in full was ‘unreasonable’, and described the document as ‘remarkably repetitious and prolix’, ‘littered with typographical errors’, and ‘replete with language that was anything but easy to understand’.
The third agreement was a ‘relatively svelte’ 30 pages and ‘slightly better written’. The dispute was now solely over who had a beneficial interest in the property left in the legacy. The agreement included a so-called ‘ATE condition’, where the terms were conditional upon the claimant getting insurance cover, which was accepted as a mistake by the solicitors. The claimant remained entirely unaware of this condition, and the deputy master ruled that this was a condition binding to the making of the third agreement, and as such the agreement was never made.
Friston rejected a submission that the claimants were in breach of SRA rules prohibiting solicitors from entering fee arrangements that they do not consider are suitable for the client’s needs. At the time the claimant solicitor drafted the retainer documents, it was found they genuinely believed them to be suitable.
But the deputy master noted that the claimant solicitor escaped censure on this issue ‘by the skin of his teeth’, adding: ‘Each and every one of the agreements was not just unsuitable for the claimant’s needs, but entirely unsuitable; the mere fact that the claimant could not have even begun to understand them compels me to such a conclusion.’