The claimant consulted the defendant solicitors’ firm with a view to represent her and her siblings in relation to a dispute with her late father’s executors concerning his will. The defendant sent the claimant and her siblings written retainer agreements which they signed. Following mediation a settlement was reached and the executors agreed to contribute towards the claimant’s costs. The defendant’s invoiced fees substantially exceeded the amount that the executors had agreed to pay. The claimant was not willing to pay those fees. The defendant agreed to reduce its costs and the claimant accepted (“the agreement”). The claimant’s new solicitors notified the defendant that the claimant would seek an assessment of their bill under the Solicitors Act 1974. On the same day, the defendant responded and indicated that it would agree to an assessment, but on the basis that the agreement was set aside. The claimant brought proceedings under CPR Pt 8, seeking an order under section 70 of the 1974 Act for assessment of the bills that had been delivered to her, in accordance with the agreement. A preliminary issue arose as to whether there had been a binding compromise as between the claimant and defendant in relation to the bills to be assessed. At a directions hearing the judge transferred the case to the Senior Courts Costs Office and directed that there should be a trial of a preliminary issue as to the legal status and effect of the agreement. In her points of claim the claimant stated, inter alia, (i) that there was clear evidence of unconscionable conduct by the defendant such that she did not enter into the agreement of her own free will, (ii) that in the alternative, the agreement was reached following illegitimate pressure and economic duress and but for such tactics she would not have entered into the agreement, and that the court should therefore set aside the transaction. The defendant sought to strike out the points of claim pursuant to CPR r 3.4(2) or r 3.1(2)(f), on the grounds that the court did not have jurisdiction to grant the remedy sought, and that a claim for rescission would have to be made in separate proceedings. The costs judge concluded that the nature of the claimant’s claim, and the remedies sought, fell within the court’s jurisdiction and he refused the strike out application.
On the defendant’s appeal—
Held, appeal allowed. (1) The power to strike out under CPR r 3.4(2) applied only to a “statement of case” which, pursuant to CPR r 2.3(1), meant a claim form, particulars of claim, defence, Part 20 claim or a reply to a defence, and any further information given in respect of a statement of case. The points of claim were not, therefore, strictly a statement of case and were not an available target under CPR r 3.4(2). Nevertheless, the costs judge had been right not to refuse the application on that basis as the defendant’s application raised an important point as to the court’s jurisdiction which it was necessary to resolve. The application had also been cast under CPR r 3.1(2)(f) which provided a general power to stay the whole or any part of any proceedings. If the application were otherwise well-founded that provided a sufficient route to the claimant’s intended terminus (para 30).
(2) The defendant had agreed to the direction that there should be a trial of a preliminary issue and, having done so, it could not complain that the court was embarking on that trial and that the defendant was setting out her case. The costs judge was exercising a highly specialised jurisdiction and considerable weight had to be given to his judgment. That was so, even though the underlying question concerned the ambit of his jurisdiction. The contours of permissible enquiry under section 70 of the Solicitors Act 1974 were not sharply defined. The views of an experienced judge in that particular field were formed from countless costs assessments which involved the resolution of many different types of dispute. That was a valuable resource for testing the outer limits of the powers of enquiry that were granted by section 70. The costs judge had said that there was nothing in section 70 that excluded a power to do what the claimant asked. It was right that section 70 did not explicitly say that a court assessing costs might not set aside a prior agreement between solicitor and client. However, where, as in the present case, a judge was exercising a wholly statutory jurisdiction, it was necessary to show what the statute positively permitted. The fact that something was not positively excluded did not mean that it was, by omission, permitted. Further, the fact that Parliament included a power to set aside a non-contentious business agreements under section 57(2), and a power to do the same in respect of contentious business agreement under section 61(2)(b), but did not include a more general power to set aside agreements under section 70, was a strong indicator that section 70 was not intended to permit that type of exercise. Accordingly, the court did not have power to set aside the agreement when assessing costs under section 70 (paras 32, 38, 47, 48, 51, 52).
Per curiam. The courts have regularly drawn attention to the need for clarity when a court orders the trial of a preliminary issue, observing that preliminary points of law are too often treacherous short cuts. This is particularly so where the preliminary issues are set in motion in a casual and unstructured way. This is, in part, because there is a considerable risk of parties approaching a preliminary issue at cross purposes (para 33).
Robin Dunne (instructed by Clear Legal Ltd) for the claimant.
Benjamin Williams QC (instructed by Richard Slade and Company Ltd) for the defendant.