Richard Buxton (Solicitors) v Mills-Owens

This is an appeal against the order of Master O’Hare dated 31 January 2008 in relation to a claim for costs by the appellant against the respondent. I will call them “the solicitors” and “the client” respectively. The appeal is brought with the permission of the costs judge, who considered that an important issue of principle arose.

The client has put in a lengthy respondent’s notice with which I will deal below.

The solicitors acted for the client in two matters. The first was a statutory appeal in relation to the grant of planning permission in relation to a property near to the client’s home in the New Forest. The second was in connection with protecting the verges of the lane outside the client’s home from encroachment and/or destruction by vehicles etc. The client was and is a fervent defender of the New Forest National Park and its environment, and I accept that everything he has done and said has been directed to that end.

The solicitors acted on his behalf in the statutory appeal to the Administrative Court until they formally came off the record at a late stage, as will be seen below. They presented a bill for their profit costs and unpaid disbursements.

The basis of the Master’s decision was that, though the solicitors were in a difficult situation, they had adopted the wrong course. He said:-

“I think they should not have terminated the instructions as they did. I do not think they had just cause, regardless of what notice they gave. I think what they should have done was carry out the clients instructions even though they had given (and would no doubt repeat) [advice] that such instructions were doomed to disaster. Because they had failed to carry out the client’s instructions I do not think they are entitled to charge him fees in this matter. They were retained for the entire business; that is conducting a statutory appeal. That has to be a statutory appeal on the basis of the instructions made by the client, so long as they are legal honest and decent. Clients cannot instruct solicitors to do anything improper but (however unwise I might think they were) I do not think this client’s instructions were, in any way, improper.”

The result was that the costs judge disallowed the solicitors claim for profit costs in its entirety. He did, however, allow their claim for unpaid disbursements. He also allowed (subject to small deductions) their claim in respect of the “roads issue” and consequently issued a final costs certificate in the sum of £8,968.50 (including VAT), the aggregate of the unpaid disbursements on the statutory appeal and profit costs on the roads issue.

He awarded the costs of the assessment to the client, which he assessed at £226 to represent the costs of his attendance on the day of the assessment. In his counter notice the client claims that he should also have been awarded £50 for his application for the detailed assessment and £600 for the appointment for the assessment; very fairly, if I may say characteristically so, Mr Buxton concedes that these amounts should have been awarded to him if the decision had been taken in principle, as clearly it had been, that the client should be entitled to his costs of the assessment exercise.

The major issue before me was therefore the conduct of the statutory appeal. The solicitors and their client parted company very shortly before the hearing in the Administrative Court on 6 February 2006, on which day the solicitors came off the record having so applied to the judge at the outset of the hearing. The judge then refused the client’s application to adjourn, and he was obliged to represent himself at the hearing. His application for a review of the decision was dismissed, as was a subsequent application to the Court of Appeal for permission to appeal.

The costs judge’s finding that the solicitors had no “just cause” for terminating their instructions means that I have had to consider in some detail the narrative of the claim for a statutory review of the planning issue. I have done this not in order to make my own decision de novo since as, Mr Buxton on behalf of the solicitors rightly accepts, the question is not whether I would have made a different decision, but whether the costs judge’s decision was wrong. Some time was therefore spent on this appeal looking through the correspondence over the crucial weeks leading up to the judicial review. Mr Buxton says more time was spent than was below and I am sure he was right. I am however advised by Master Simons that cost judges receive their papers at least a week before a detailed assessment hearing and make it their practice to read them well in advance. This has indeed resulted in the summary of the chronology which appears at paragraphs 2-9 of the judgment below being accepted by Mr Buxton as one from which he does not dissent.

The application was from the start bedevilled by what the costs judge found was a fundamental problem. The client did not understand and still does not understand the limited basis upon which such a planning appeal is possible. He wanted the appeal to be presented on a much wider basis by reference to the merits of the case and the need for the safeguarding of an environment of which he is understandably protective. He found it difficult, indeed impossible, as the costs judge below found, and as I find, to accept that for such an appeal to succeed it is necessary to point to a procedural error or some other legal flaw in the approach of the planning inspector. This was the thrust of an initial advice from counsel received within a week or two of the first instruction of the solicitors, to the effect that there was no reasonable prospect of challenging the decision.

The client did not accept this advice and the claim was lodged shortly before time expired. Fresh counsel was instructed and on 19 December 2005 the skeleton argument he had prepared was handed to the client by the solicitors. That skeleton focused on ground (a) of the claim, which arguably involved an error of law on the part of the inspector, and ignored grounds (b)-(d) which could be described as going more to the general merits of the planning decision. The next day on 20 December 2005 the client sent a long letter (12 pages in all) in which he made detailed comments of critical nature on what the skeleton argument said and the fact that it did not include ground (b) -(d) which he instructed the solicitors to include.

The parties thereafter remained at loggerheads. Mr Buxton wrote a long letter on 30 December seeking to confine the claim to ground (a) and giving sensible reasons why this should be the tactic to adopt. The client remained adamant that the skeleton must not be put in until he had had proper time to approve it. The hearing was fixed for 6 February 2006 and the skeleton argument had to be lodged by 16 January. Time was therefore short.

Mr Buxton took us through all the relevant correspondence that followed he tried to reach what the costs judge called “accommodations” with his client, but in the end he had no success.

By 7 January 2006 matters were coming to a head. Mr Buxton pointed out that counsel was constrained in what he could put in the skeleton argument and that he would “personally be criticised by the court if he makes points that he considers unarguable”. There is no particularly clear evidence of counsel having expressed such concern, though he had on 25 September 2005 described ground (a) as one which had a proper argument in its favour and in a note of 3 January 2006 he thought that the other three grounds were likely to fail.

So in his letter of 7 January 2006 Mr Buxton offered three possible ways out of the impasse that had been reached, namely that the client should accept that an amended form of counsel’s skeleton go forward, with a possibility of future specific amendments; secondly that a second opinion be taken from another barrister; thirdly that the client withdraw his instructions which as he put it “would be disappointing”.

The client remained adamant and said on 11 January 2006 “I am sorry that you have left me at this late stage to do my skeleton argument myself. I will of course pay your bill where monies are owing…”

In the correspondence that followed Mr Buxton endeavoured to keep the case afloat despite the terms of the client’s letter of 11 January. He took the advice of the Law Society on 24 January, with two weeks or so to go to the hearing, who advised him against writing to the court in the way he was intending to write, who thought that the solicitors “have not been specifically disinstructed” but that their position as a firm was untenable and they could terminate the retainer for good reason and would have to make an application to come off the record.

Mr Buxton received the clients own “homemade” skeleton argument on or about 25 January direct from the Treasury Solicitor, who had received it from the client, but he was still plainly trying to continue to act as his solicitor. In several letters he repeats his point of view and threatened for the first time on 30 January to come off the record unless instructed to appear with counsel and “present your case as best we are able in all the circumstances”. The client was adamant, said it was his way of presenting the case that he wanted and all he wanted the solicitors to do was apply for an adjournment.

The foundation of Mr Buxton’s attack on the finding below is that the case that the client was instructing him to advance was an improper case in the sense of being not properly arguable, whereas the skeleton argument drafted by counsel was a wholly tenable argument. He points to the then current guide to Professional Conduct of Solicitors (1999) Rule 12.12 Para 2 to the effect that a good reason for termination of a retainer is

“…where a solicitor cannot continue to act without being in breach of the rules or principles of conduct, or where a solicitor is unable to obtain clear instructions from a client or where there is a serious breakdown in confidence between them”

He also relies on the Bar Code of Conduct 708 (f), to the effect that a barrister conducting proceedings in court “must not make a submission which he does not consider to be properly arguable”. It would therefore be wrong, he argues, for a solicitor to instruct a barrister so to do.

Mr Buxton was in a most difficult position. He went to very great lengths to explain the problems that the client faced to him and to persuade him to adopt a stance which was more likely to result in success than failure. But the issue is whether the client’s insistence on doing it his way put Mr Buxton as a solicitor in breach of the rules or principles of conduct, which the cost judge accurately summarised as not to “do anything improper”.

I have considered whether the findings of the costs judge to the effect that what the client was asking the solicitor to do was any way improper was one he was wrong to reach. I have the benefit of the advice of Mr Cockx as an experienced litigation solicitor in this respect, and my own experience as an advocate in such circumstances. There are occasions where the line is difficult to draw. An advocate will often say to a costs judge that a particular argument is advanced “on instructions” or words to that effect. An advocate can also expect to receive strong comment from the bench as to whether or not a particular proposition is valid, or even whether it is arguable. But in my judgement at the end of the day if a client who is prepared to pay for a case to be advanced, and who wants the claim advanced on a particular basis, which does not involve impropriety on the part of the solicitor or counsel, then it is no answer for the solicitor to say that he believes it is bound to fail therefore he will not do it.

Whatever one thought about the client’s stance his instructions were firm and unequivocal as to how he wanted his case to be presented. I agree, as it happens, with the costs judge’s analysis of the crucial letter of 7 January 2006 at which Mr Buxton had written that “we cannot act for you if we are at crossed purposes” and “we entirely respect your views and of course have to respect your instructions”. As the costs judge put it “it is more than respect for instructions which is needed; so long as they are proper instructions (however misguided solicitors think them) they should not just respect them they ought to follow them”.

I have very considerable sympathy for the solicitors here who had a very difficult problem and a difficult client. But the litigator’s back must be broad, and provided that he has given clear advice to a client, if that client wishes to pursue a case which the solicitor honestly believes is going to lose the client is entitled to instruct him to do so, absent any impropriety or misleading of the court. It is my judgement, assisted by but not dependent on the solicitor assessor sitting with me, that the position here fell short of the line where the solicitor would have been entitled to terminate the retainer and that the costs judge here was right to assess the matter in the way he did.

The second ground of appeal is that although in principle the nature of a solicitor’s retainer is one of an “entire contract” in this case that works unfairness and operates harshly against the solicitor’s interests and should be modified.

The rule itself appears in the old case of Underwood Son and Piper v Lewis [1894] 2 QB 306, a Court of Appeal decision in which Lord Esher MR set out the general proposition in this way:-

“When a man goes to a solicitor and instructs him for the purposes of bringing or defending such an action, he does not mean to employ the solicitor to take one step and then give him fresh instruction to take another step and so on; he instructs the solicitor as a skilled person to act for him in the action, to take all the necessary steps in to and to carry it on until the end. If the meaning of the retainer is that the solicitor is carry on the action to the end, it necessary follows that the contract of a solicitor is an entire contract – that is a contract to take all the steps which are necessary to bring the action to a conclusion”

He continued:-

“I do not propose to go through all the cases cited but it seems to me that from time downwards it has been held that a solicitor cannot sue for his costs until his contract has been entirely fulfilled, unless the case is brought within some recognised exception to the general rule”

He listed as an exception where the client was not prepared to finance disbursements but expected the solicitor to do so out of his own pocket. He also appeared to contemplate that a lengthy and complicated Chancery action which might be divisible into stages could be the subject of successive or serial retainers.

AL Smith LJ looked at further possible exceptions to the general rule and said:-

“Speaking for myself I should say that the solicitor is not bound to go on acting for the client if the client insists on some step being taken which the solicitor knows to be dishonourable; and many other cases may be supposed in which the solicitor may be entitled to refuse to act for the client any further. I should say that when a solicitor is in a position to show that the client has hindered and preventing him from continuing to act as a solicitor should act, then upon notice he should decline to act further; and in such a case the solicitor would be entitled to sue for the costs already incurred. But we have not now to deal with such a case. The sole question here is whether the solicitor is entitled without rhyme or reason to throw up his retainer having giving due notice of intention to do so. I do not think that he is so entitled”

In Warmingtons v McMurray [1936] 2 All ER 745 Goddard J as he then was described this rule as not just being one applicable only to the relationship of solicitor and client but as “part of the ordinary rule of contract” and said that where there is an entire consideration there must be entire performance to entitle the plaintiff to remuneration. But he added “If however a client does not perform his part of a bargain, that would discharge the solicitor and he may then sue on a quantum merit.” He instanced a case where the client failed to put the solicitor in funds for counsel’s fees and other disbursements.

Looking at the contractual arrangements in this case, while the client care letter of 24 June 2005 is not as clear as it should have been there is no doubt that the retainer was to act for the client throughout the course of the statutory appeal. The standard terms of business attached to the client care letter dealt with termination by the solicitors in this way

“….we may decide to stop acting for you only with good reason, for example if you do not pay an interim bill or comply with our request for payment on account”.

I was referred to but not assisted by the decision of Aldous LJ in Cocker v Tofield Swann and Smythe (unreported) 12 May 2000 which was a renewed application for permission to appeal in a solicitor’s negligence claim, in which the “entire contract” point was not advanced, and the matter was dealt with on the basis of whether there was a claim in negligence and damage could be proved. This was an unargued application, it having been advanced by a litigant in person.

Mr Buxton acknowledges that I am bound by the general principle stated in Underwood and having found, as I have, that the costs judge was entitled to find that there was no just cause for termination that really determines the matter. He argues that the Court of Appeal’s authority is elderly and should be applied more flexibly to modern conditions. He says that there should be implied into the contractual relationship between solicitor and client such terms as “if there is a case we will take it to its conclusion” and “you as a client must act reasonably”. While I can see that such terms may be desirable in the interests of solicitors to avoid just the sort of problem that these solicitors found themselves in, their implication is not necessary for the performance of the contract and I would not for my part be prepared to consider their incorporation by implication into a contract of retainer absent any express term to that effect.

There may come a case when the “entire contract” principle falls to be reviewed in the way Mr Buxton suggests, but I am of the clear view that this is not it. Until that case emerges it is dangerous, and for these purposes unnecessary, to attempt to depart from the principle, or to identify other examples of “just cause” for termination.

The client for his part, while upholding the disallowance of profit costs, objects that he should not have been required to pay any disbursements if the solicitors terminated without just cause. The first point to note is that he did not raise this objection in his points of dispute on the detailed assessment. Nevertheless in argument he said that he was not obliged to pay for the fees paid to counsel before drafting the skeleton argument because it was flawed and mis-stated the basis of the inspector’s decision. I have looked at the criticisms he made in his letter of 20 December 2005. While he was entitled to raise those points, his argument amounts to no more than this that a client is only obliged to pay disbursements for counsel’s fees if he agrees with all aspects of the advice or other work of counsel. The authorities to which I have referred to deal with the inability of the solicitor to recover profit costs when an entire contract is terminated prematurely without cause. The same arguments are manifestly not applicable to monies which are disbursed for counsel’s fees, court fees and the like and the argument against this part of the judge’s order is in my judgement misconceived.

The only exception I would make with the benefit of the advice of my assessor is that the items on the 1^st and 6^th February 2006 (£50 in respect of an issue fee and £28.50 travel for the purpose of obtaining the solicitors’ removal from the record) ought not to have been included. The costs of a solicitor removing himself from the record in these circumstances should be and normally are borne by the solicitor himself. With those two exceptions, which will lead to some necessary minor amendment of the final cost certificate, this argument fails.

This was the subject of a separate bill of costs because as part and parcel of the difficulties he was experiencing the client wanted the solicitors to “take out an injunction” as he puts it against those who were damaging the verges of his lane. It was not a straight forward matter because it required proof of title of the verges at the front of the client’s house which in turn involved what Mr Buxton described as “obscure research”. The issues were very different from those raised in the planning appeal and there were different defendants. For those reasons, which I accept as valid, the solicitors decided a separate file was needed to keep the costs of the two exercises distinct. The solicitors argue that they achieved success to the extent that an undertaking was received to cease work on the roads.

At all events the issues on this bill were, as I am satisfied, fully argued below and the costs judge accepted that this was a different situation from the planning appeal, where there was plainly an entire contract.

I am unable to find on the material placed before me that the costs judge was anything other than entitled to reach this decision. Likewise I am not impressed that there is any arguable point to be based on the format of the bills which the clients sought to develop in argument before me. The cost judge plainly did not regard that as a problem and nor do I.

My conclusion therefore is that the order made was not wrong, indeed it was right, and the appeal against it should be dismissed. The cross appeal fails, save to the extent that (a) the two sums I have itemised above should be deducted from the overall entitlement as being irrecoverable disbursements and (b) the costs of the assessment in favour of the client should be increased by £650.