The Solicitors Code of Conduct requires “that clients receive the best possible information about how their matter will be priced and, both at the time of engagement and when appropriate as their matter progresses, about the likely overall cost of the matter and any costs incurred.” Undoubtedly, there are circumstances where failure to provide a client with adequate costs information may limit the amount that the solicitor is entitled to be paid by a client. Failure by a solicitor to give an estimate does not in itself render a contract of retainer between the solicitor and client unenforceable, but it could have an impact on recoverable costs. If the amount payable by the receiving party to his or her own solicitor would have been lower if adequate advice had been given, costs unreasonably incurred as a result will be irrecoverable from the opponent. A solicitor, at costs assessment, will not recover costs that have been unreasonably incurred because of failure by the solicitor to provide adequate costs advice.
However, in the recent case of Clare Griffin v Kelyman & Co Solicitors Limited [2024], the above-mentioned requirements were examined further, in particular whether it may be appropriate to limit the amount payable by the client to the solicitor to an amount that is reasonable if, on the assessment of costs between a solicitor and a client it is found that the solicitor has:
- Never provided the client with an estimate of the costs that the client was likely to pay; or
- Provided the client with an inadequate estimate of the costs that the client was likely to pay.
Costs Judge Leonard commented within his judgment that “the aim will always be to identify the sum that, in all the circumstances, it is reasonable for the client to pay”. If an inadequate estimate is given at the outset, then the fact that it was subsequently updated may not be sufficient to prevent the solicitor’s costs from being limited by reference to the original. The rationale here is that by the time the updated estimate is given, it may be too late for the client to choose an alternative course of action.
That said, many solicitors will at the outset of a retainer be unable to offer anything more than a tentative and highly qualified figure by way of a costs estimate. It may not be possible to give any sort of meaningful figure at that stage. Moreover, it could be argued that it would be irresponsible to produce an estimate when the information available is so limited that it would be “more speculative than real”. Costs Judge Leonard stated that the obligation is only to give the client a realistic indication of the likely cost of a matter, based on what is known at the time. Any initial estimate must necessarily be founded on two premises; namely, that the client will (subject to any client’s right reasonably to query and discuss it) accept the advice of solicitors and counsel, rather than resisting, overruling, or ignoring it and that the client will behave in a way that is reasonable and conducive to the cost-effective conduct of the case in hand. If after the estimate is given, the client refuses to accept reasonable advice and chooses to behave in a way that is not reasonable and is not conducive to the cost-effective conduct of the case, then it does not lie with the client to visit the financial consequences of that conduct upon the solicitor.
The authorities simply do not support the conclusion that a solicitor must go unpaid for unnecessary or excessive work undertaken in consequence of a client’s own unreasonable conduct, merely because that conduct has made nonsense of a previous estimate. The most a solicitor could be expected to do is provide a realistic estimate within normal parameters and warn the client that if he/she persists in unreasonable conduct, the final figure might be far higher.
At Buckles we have a team that is experienced in advising on contentious costs disputes and in pursuing detailed costs assessment proceedings where necessary. Please contact us if you require any assistance in this regard.
