2020-02-17
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Make sure you have a valid retainer or risk not getting paid

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Posted by Jennifer Rhind on 29 April 2015

Jennifer Rhind Solicitor

The reported case of Scott -v- Hull and East Yorkshire Hospitals NHS Trust [2014] Ew Misc B53 (CC) highlights the importance of solicitors being able to prove there is a valid retainer between them and their client. Failure to do so is likely to result in a solicitor being unable to recover their costs from their client.

Facts

The Claimant was represented by Rapid Response Solicitors (“Rapid”) in a clinical negligence claim against Hull and East Yorkshire Hospitals NHS Trust. The Claimant was successful with his claim and Rapid served a Bill of Costs totalling £112,000.  The Bill of Costs was certified as being accurate and was calculated using an hourly rate of £400 plus VAT. In addition, the Bill of Costs referred to Rapid being instructed pursuant to a Conditional Fee Agreement (“CFA”) which provided for a success fee of 100%.

Points of Dispute were served which raised the issue of there possibly being a second CFA. The Replies were served and it was claimed by Rapid that there was only one CFA.  Prior to the detailed assessment hearing taking place, Rapid served an amended Bill of Costs. Rapid had reduced their hourly rate to £146 plus VAT and success fee to 54%. This reduced the overall figure being claimed by Rapid to £36,000.

The matter was listed for a detailed assessment hearing. It became clear at the hearing that there were in fact two CFAs. Rapid conceded that the Reply was incorrect. Rapid was given the option to either disclose the CFAs or rely upon secondary evidence to prove the nature of the retainer and show their entitlement to an uplift. The matter was listed for a further hearing to deal with this preliminary issue.

At the further hearing, Rapid stated they were not willing to disclose these other than to the Court and would be relying upon the witness statement of Mr Thompson and his oral evidence. The Court could not order Rapid to disclose their retainer documents to their opponent.  There were a number of issues with Mr Thompson’s evidence:

  • He was not one of the fee earners involved in the matter.
  • His witness statement contained an error in respect of the date when enquiries were made of the BTE insurers.
  • He did not prepare either CFA.
  • He was unable to confirm whether the CFAs relate just to the NHS Trust or to Dr Darren Wheatley or both.

In accordance with CPR 44.3(b), the costs were to be assessed on the standard basis so any doubts were to be resolved in favour of the paying party who in this case were the NHS Trust.

District Judge Besford’s Findings

  • The original Bill of Costs was mis-certified and upon the balance of probabilities, DJ Besford could not be satisfied that the signature of compliance could be relied upon.
  • The service of an amended Bill of Costs was due to the points raised in the Points of Dispute and not Rapid’s acceptance that the original rate claimed breached the indemnity principle.
  • Mr Thompson’s witness statement and oral evidence is flawed.

Due to these reasons, DJ Besford could not be satisfied that the two CFAs were valid retainers between Rapid and the Claimant and struck out the Claimant’s claim for costs. 

As a consequence of having no valid retainer, Rapid were not able to recover any of their costs from the Claimant apart from disbursements that had been incurred and paid out prior to the assessment hearing.

Conclusion

Solicitors should ensure that the retainers they have entered into with their clients are valid as if a Court finds them not to be, they are at risk of losing their entitlement to claim their costs on an inter-partes basis and from their client. It was implied that the easiest way to overcome any issues is to ensure that you comply with the rules by disclosing your retainer documents or providing a statement of reasons and ensuring your retainer documents are available to the Judge at an assessment. 

About the author

Jennifer is a solicitor in the commercial litigation department.

Jennifer Rhind

Jennifer is a solicitor in the commercial litigation department.

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