Section 70 Solicitors Act 1974: Swann v Slater & Gordon
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Section 70 of the SA1974
Section 70 Solicitor’s Act 1947 allows for Solicitor Client Assessments to take place if a client believes they have been overcharged for services provided by a Solicitor. This type of assessment was observed in the case of Swann v Slater & Gordon when over 400 retainers were assessed to decide whether informed consent was provided to all clients. Under CPR 46.9(2), a Solicitor has a duty to provide informed consent as to costs to all clients however, there is debate as to what constitutes ‘informed consent’ with the earlier High Court matter of Belsner stating the Solicitor had a fiduciary duty to the client even before the retainer had been entered into.
Swann v Slater & Gordon
In Swann District Judge Rouine was assessing more than 400 retainers between Solicitor and client, with Swann being the leading case.
Each retainer being assessed included a cap on the client’s liability to contribute to costs, set at 25% of the damages recovered. DJ Rouine held that this cap provided informed consent when he stated the following:
‘Being told that there is a cap, and what that cap might be, is more than sufficient information… for the purposes of obtaining informed consent from a client for deductions to be made from their award of damages.’
DJ Rouine continued that it would be impossible for solicitors to ‘provide a client with specific advice as to every scenario and every level of damages which might be awarded and the impact that such an award would have on the sums which the solicitors say could be deducted from the award of damages.’
DJ Rouine continued:
‘The realistic and pragmatic approach… is for the client to be made aware of their potential maximum exposure to a deduction from damages.’
Furthermore, DJ Rouine assessed whether a breach of fiduciary duty had occurred regarding the retainer. He accepted Slater and Gordon’s submissions that a fiduciary duty could not arise while ‘the process of negotiating the terms of the retainer relating to the solicitor’s remuneration remains ongoing’.
This recent ruling has been distinguished from the ruling of Belsner v Cam Legal Services’ case, whereby Mr Justice Lavender found that informed consent was not present. DJ Rouine stated that there was a significant factual difference between these two cases, as in the current case, there had been a cap on damages present whereas no such cap was present in Belsner.
Section 70 Solicitors Act 1974
Section 70 of the Solicitors Act 1974 deals with applications for assessments of a Bill of Costs, setting out time limits for applications to be made for detailed assessments.
Subsection 1 states that where an application for assessment is made within one month from delivery of the Bill, (made by the party chargeable with the Bill), then the Court shall order that the Bill is to be assessed.
If an application is made outside of the expiry of this period, the Court can still make an order for the Bill to be assessed if it deems it fit to do so.
Subsection 3 of Section 70 Solicitors Act 1974 states:
“(a) after the expiration of 12 months from the delivery of the Bill, or
(b) after a judgment has been obtained for the recovery of the costs covered by the Bill, or
(c) after the Bill has been paid, but before the expiration of 12 months from the payment of the Bill.
no order shall be made except in special circumstances”
Any order made for the assessment of a bill on an application under Section 70 of the Solicitors Act 1974 made by the party chargeable with the Bill shall also be an order for the assessment of profit costs covered in the Bill.
‘Special circumstances’ is wide-reaching, but can include:
· Unreasonably high costs
· A substantial delay in paying the costs
· Prior agreement to assessment
· Failing to provide a breakdown of the costs with the Bill of Costs
· Providing misleading information regarding the client’s right to an assessment.
· Personal health issues, which can result in a delay in an application being made.
Section 70 of the Solicitors Act 1974 also states that every Court Order for the assessment of a Bill shall require the costs office to assess the Bill and the costs of the assessment (paragraph 7).
Subsection 9 states that, unless the order for assessment was made following an application made by the Solicitor, and the party chargeable does not attend the assessment, then the costs of the assessment shall be paid according to the event (assessment). For example, if the amount of the Bill is reduced by one fifth, the Solicitor shall pay the costs, but otherwise, the party chargeable shall pay the costs.
If an assessment is ordered, the Bill of Costs should be a statute bill and comply with the Solicitors Act 1974. For further detail regarding what constitutes a statute bill, you can find out more here. It is important for every Solicitor to familiarise themselves with the statute billing process, in order to avoid historic challenges to fees deducted from damages months, or even years earlier.
How Can ARC Costs Assist?
As well as undertaking legal costs work such as the preparation of Bill of Costs, Precedent H and Points of Dispute, we can also provide advice and representation at Detailed Assessment Proceedings in line with Section 70 Solicitors Act 1974.
Furthermore, we can advise on retainers’ terms and contents, specifically on the validity of retainers between Solicitors providing legal services and their clients.
Should you wish to discuss your query further, you may contact us on 01204 397302 or email@example.com. Alternatively, you can complete the online query form on our website, and we will contact you to discuss your query further.