“Exceptionally large increases” to solicitors hourly rates lead to a finding of special circumstances

Under the Solicitors Act 1974, a client only has an absolute right to an assessment of a solicitor’s bill if an application is made within one month of receiving the bill. While an assessment can still be ordered where the bill is unpaid 12 months of receipt of the bill, once those 12 months have expired, the client must demonstrate that there are special circumstances before an assessment can be ordered.

In Raydens Ltd v Ms Julie Cole [2021] EWHC B14 (Costs), the defendant asked the court to make a finding of special circumstances based on the adequacy of costs estimates, billing irregularities and unilateral increases to hourly rates.

The merits of the defendant’s case on cost estimates and billing irregularities were not considered, as those issues represented a new case not addressed in witness evidence. The issue of increases to hourly rates did, however, result in a finding of special circumstances.

The claimant represented the defendant in matrimonial proceedings from 2013 until 2018. The engagement letter provided for hourly rates to be reviewed at the beginning of April each year. The claim was conducted by a partner and a junior assistant. Between 2014 and 2017, the partner’s rate increased from £245/hr to £320/hr and the junior assistant’s rate increased from £100/hr to £165/hr.

In making a finding of special circumstances, the Master found that the increased hourly rates were presented to the defendant as a fait accompli and if there was an explanation to justify the increases, it was not given to the defendant. The Master also considered that there must be an issue about informed approval by the defendant of the hourly rate increases.

The fact that the contract of retainer provided for increased hourly rates and the claimant had communicated those to the defendant in accordance with their contractual obligations, does not seem to have been enough in this case defend the application for assessment.

This article originally appeared in our August 2021 Newsletter which can be found here.

You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.

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