SENIOR COURTS COSTS OFFICE
Strand, London WC2A 2LL
B e f o r e :
| NADARAJAH VILVARAJAH
|- and -
|WEST LONDON LAW LIMITED
Mr Roger Mallalieu (instructed by West London Law) for the Defendant
Hearing date: 2 May 2017
Crown Copyright ©
Master Gordon-Saker :
Solicitors Act 1974, s.61(1)
(1) No action shall be brought on any contentious business agreement, but on the application of any person who -
(a) is a party to the agreement or the representative of such a party; or
(b) is or is alleged to be liable to pay, or is or claims to be entitled to be paid, the costs due or alleged to be due in respect of the business to which the agreement relates,
the court may enforce or set aside the agreement and determine every question as to its validity or effect.
(2) On any application under subsection (1), the court -
(a) if it is of the opinion that the agreement is in all respects fair and reasonable, may enforce it;
(b) if it is of the opinion that the agreement is in any respect unfair or unreasonable, may set it aside and order the costs covered by it to be assessed as if it had never been made;
(c) in any case, may make such order as to the costs of the application as it thinks fit.
148. The outcome of the case provides no particular assistance, but in the course of his judgment Lord Esher M.R. gave the following guidance on the proper approach under those statutory provisions:
"By s.9 the Court may enforce an agreement if it appears that it is in all respects fair and reasonable. With regard to the fairness of such an agreement, it appears to me that this refers to the mode of obtaining the agreement, and that if a solicitor makes an agreement with a client who fully understands and appreciates that agreement that satisfies the requirement as to fairness. But the agreement must also be reasonable, and in determining whether it is so the matters covered by the expression "fair" cannot be re-introduced. As to this part of the requirements of the statute, I am of opinion that the meaning is that when an agreement is challenged the solicitor must not only satisfy the Court that the agreement was absolutely fair with regard to the way in which it was obtained, but must also satisfy the Court that the terms of that agreement are reasonable. If in the opinion of the Court they are not reasonable having regard to the kind of work the solicitor has to do under the agreement, the Court are bound to say that the solicitor, and an officer of the Court, has no right to an unreasonable payment for the work he has done and ought not to have made an agreement for remuneration in such a manner. On this question it is quite clear to me that we cannot arrive at any other conclusion than that arrived at by the Divisional Court. It is impossible to say that work which according to information given by the taxing master to the Divisional Court would be properly remunerated by a sum of £20 can be reasonably charged at £100. The decision of the Court below must be affirmed, and the appeal dismissed."
149. I find the analysis in that case helpful to the extent of identifying that the issues of fairness and reasonableness must be considered separately. Fairness relates principally to the manner in which the agreement came to be made. Reasonableness relates principally to the terms of the agreement.
The conditional fee agreement
In exchange for us accepting the risk of payment at only 64.29% (approx) of our agreed primary hourly rate if you are unsuccessful, we are entitled to a risk success fee if you achieve success, amounting to a £270 (64%) increase on the primary rate, ie £690 per hour plus VAT.
i) The Claimant failed to achieve success (ie nothing was disallowed in the Hodders Law claim) in which event the Claimant would be liable to pay the discounted rate of £150 for all fee earners.
ii) The Claimant succeeded in having some sum disallowed in the Hodders Law claim in which event he would be liable to pay the primary rate of £420 for all fee earners.
iii) The Claimant succeeded in having some sum disallowed in the Hodders Law claim and was awarded costs against Hodders Law in which event he would be liable to pay the primary rate of £420 plus a success fee of 64 per cent for all fee earners (£690 per hour).
iv) The agreement was terminated in which event the Claimant would be liable to pay the primary rate of £420 for all fee earners.
Attending client in our offices. Went through the CFA with him before he signed the same. He is acceptable to the same in that he is liable for barrister's fees. I will find out how much the barrister's fee will be for the forthcoming hearing on Friday. Time: 5 units
The Defendant was only prepared to act on the Claimant's behalf under a CFA on the terms offered and the Claimant was fully aware of this.
The parties' submissions