High Court of Ireland Decisions

Judgment Title: Boyne v Dublin Bus/Bus Atha Cliath & Anor

Neutral Citation: [2006] IEHC 209


High Court Record Number: 2000 12133P

Date of Delivery: 14/06/2006

Court: High Court

“Dear Luke
Thank you very much for your instructions in connection with this matter, and [we] are pleased to act on your behalf. It is not possible, at this stage, to give you a note of our actual charges nor a detailed estimate and for this reason we set out briefly the basis upon which our charges will be made.
Solicitors’ charges are generally calculated by reference to the time spent on the matter in question and the nature of the work concerned. The level of charge will also depend on:

1. The complexity of the matter
2. The urgency of the matter
3. The difficulty or the novelty of the question raised
4. The skill, labour specialised knowledge, and responsibility involved
5. The number and importance of the documents prepared or examined
6. The amount or value of the transaction involved
7. The importance of the matter to you.
8. The time reasonably spent by us on the matter
9. The place, or places and the circumstances in which the proceedings are pursued.

In addition to the Solicitors professional fee may be items of outlay that will have to be discharged to you. These outlays may include stamp duty on Court documents, fees payable to Doctors, Engineers, Surveyors, Paramedics, Barristers, both Senior and Junior Counsel and Accountants, if necessary. Where V.A.T. arises it is currently calculated at 21% and such V.A.T. is also your responsibilities.

· Losing, or
· Compromising the case, or
· The Court failing to award you your costs or a portion of them, or
· The Court awarding costs against you, or
· Being unable to recover your costs due to the financial status of the other party

“unless such agreement is in writing and includes an estimate (as near as may be) of what the solicitor reasonably believes might be recoverable from any other party or parties (or any insurers of such party or parties) in respect of that solicitors charges in the event of that client recovering any damages or moneys arising out of such contentious business”.

“The defendants maintain that the absence of such a letter has the effect that the plaintiffs cannot therefore recover their costs, outlays and disbursements, since the requirement under section 68(1) is mandatory, even if such an effect is a draconian one. The plaintiffs contend however that if such a draconian consequence was intended by the legislature, the Act would have clearly stated it. They also submit that such an interpretation would render subsection (7) meaningless, since it provides that notwithstanding anything contained in section 68, nothing shall prevent any person from exercising any existing right to require a solicitor to submit a bill of costs for taxation. They say that this clearly shows that a situation was contemplated that even in the absence of a section 68 letter, a bill could be taxed, and that this is meaningless if the absence of such a letter has the effect of no costs being recoverable by the solicitor.
Counsel for the defendants has submitted that the purpose of section 68(1) is to ensure that the client is in a position on receipt of a bill to form an opinion as to whether it is a correct bill by reference to the letter setting out the charges or the basis of the charges which will be made for the service provided. They also submit that it is not unknown for an Act of the Oireachtas to be silent as to the effect of a mandatory section and for there nevertheless to be serious effects in the event of non-compliance, particularly in the area of planning legislation, and the court was referred to a number of cases in which this was found to be so, namely State (Elm Developments) v. An Bord Pleanála [1981] ILRM 108; Monaghan Urban District Council v. Alf-a-Bet Promotions Limited [1980] ILRM 64; and Blessington Heritage Trust Limited v. The County Council of the County of Wicklow and others [1999] 4 IR 571. In response Counsel for the plaintiff has submitted that these planning matters can be distinguished since they occur as part of an administrative process, whereas that is not the situation in relation to the question of costs.

In relation to subsection (7), Counsel for the defendants submits that the plaintiffs interpretation is incorrect, and that another interpretation is possible, namely that where a solicitor has complied with the provisions of section 68(1), a bill can still be referred to taxation.

The defendants also submit that if the effect of failure to provide a letter as provided for in section 68(1) is not to deprive the solicitor of his right to recover his costs, the client derives no benefit from the section, since the obligation is rendered meaningless, and provides him with no protection.

Taking this latter point first, it is not correct that there is no sanction on a solicitor, or no redress for the client, if the letter is not sent as required by the Act.

Firstly, the absence of such a letter is something which the Taxing Master may, if he wishes, take into account when deciding upon the appropriateness of the fees sought. If fees being charged are in excess of what the Taxing Master considers appropriate in the absence of prior notification of the basis of charges, it would be something he can have regard to, even if he might be prepared to allow the same fees where a letter had been written.

Secondly, the failure to comply with the requirements of the section is something which the Disciplinary Tribunal of the Law Society can have regard in an appropriate case, and indeed has done so in recent times, resulting in the censure and fining of a solicitor who was found to have failed to comply with the obligations imposed upon solicitors by section 68.

In relation to the other submissions under this heading, I do not believe that section 68 was intended to derive the solicitor, who has failed to send a section 68 letter, of his right to recover his costs when taxed, in spite of the fact that the section is worded in mandatory terms. I agree with Counsel for the plaintiff that if such were to be the consequence of failure to send the letter, it would have said so in clear terms given the seriousness of the consequence of failure to do so. The cases to which the defendants have referred the court are cases involving mandatory procedures laid down as part of an administrative process, and cannot in those circumstances be called in aid of their submissions under this heading. Section 68 is not part of an overall scheme created by the Act. Rather it is a “stand alone” section designed to put in place a number of recruitments, intended to provide greater protection to clients of solicitors in the matter of costs, but are not intended as a substitute for the statutory role of the Taxing Master who is charged with the task of ensuring that a client is only charged appropriately for services rendered, upon a Bill of Costs being presented for taxation. The client’s right to have all costs taxed in this fashion is the ultimate protection available, and the Taxing Master is fully empowered to take all relevant matters into account when performing that task, including the power to attach such significance to the absence of a section 68 letter as he deems appropriate in any particular case. There is of course also the right to a party dissatisfied with the determination of the Taxing Master to seek a review of the taxation by the High Court.

The defendants’ objection under this heading must also fail.
I also favour the submission of the plaintiffs that subsection (7) of section 68 would be meaningless, and superfluous, if the interpretation put forward by the defendants was correct.”

“1. That when it is established on taxation that the party for the costs is the client of the solicitor on record in the litigation and for the applicant on the summons to tax there then exists a presumption that the personally is personally liable to pay the solicitors costs.
2. That presumption can be rebutted if it can established that there was an express or implied agreement binding on the solicitors that the plaintiff would not have to pay solicitor and client costs in any circumstances.
3. That it is only where the paying parties raised a genuine issue as to whether the party for the costs is liable to pay his solicitors that it would be necessary to prove by evidence that he is under a legal liability to pay.”

“If a paying party is in any doubt that the plaintiff might not have to pay solicitors costs then this issue should be raised at the final order as to costs by the court. The court has a discretion to awards costs and a need to limit the extent of the costs that a successful litigant should recover. The onus is clearly on the paying party to establish by genuine facts and not by mere speculative submission on taxation that the plaintiff has no liability to his solicitor for costs. As can be seen from several cases above referred to the law is very clear and unambiguous on this precise issue”.

“On the true interpretation of the statutory framework for costs estimates a contract of retainer between solicitor and client was not rendered unenforceable by a failure by the solicitor to given an estimate of costs as required by the code. It was a question for the discretion of the judge assessing costs in any particular case whether to take into account any failure by the receiving party to provide an estimate in the circumstances and of the kind required by the code. Where the solicitor for the receiving party had failed to give to his client an estimate of costs in accordance with the code as required by the practice rules, the paying party could, if he had grounds to do so, submit that, if the receiving party’s work had been estimated in accordance with the requirements of the code, a lower amount of costs would have been incurred. In those circumstances he could ask the costs judge to require the receiving party to prove that such an estimate was given. The costs judge had to be satisfied that there was some real basis for the paying party’s contention that the receiving party should be required to prove that there was an estimate, or an adequate estimate, and that the dispute was not a sham or fanciful dispute. The costs judge also had to be satisfied that the absence of an estimate, or a proper estimate as to costs, could have had a calculable, and not immaterial, effect on the costs claimed. In the instant case no reason had been advanced to the judge as to why the presence of an estimate of costs would have made any difference to the amount of costs that the paying party should be required to pay. The judge’s order had accordingly been correct and the appeal would therefore be dismissed.”

“The launch pad for the appellants’ arguments is the indemnity principle, which I described at the outset of this judgment. In reliance on the indemnity principle, Mr Morgan argues that if, as he submits, the effect of the receiving party’s solicitors’ failure to give an estimate is to render the receiving party’s promise to pay his solicitor’s fees unenforceable, no fees are recoverable from the paying party. This is so if the receiving party wishes to pay his solicitor and considers it appropriate to do so.
To determine the effect of a failure to give an estimate of costs, it is necessary to examine carefully the legislative framework on which the obligation to produce such an estimate is imposed. In that way the nature of the obligation can be determined.
I have set out the legislative framework above. Estimates are required only by the code (as defined above). The code is made pursuant to r 15 of the Solicitors’ Practice Rules. These rules are made by the Council of the Law Society pursuant to s 31 of the 1974 Act (set out above). In making these rules, the Council of the Law Society is acting in the public interest, and the rules have the force of subordinate legislation (see Swain v. Law Society [1982] 2 All ER 827, [1983] AC 598). The inference I would draw is that the code is there to protect the legitimate interests of the client, and the administration of justice, rather than to relieve paying parties of their obligations to pay costs which have been reasonably incurred.
But the rules are silent on the effect of a breach of a code on an assessment of costs as between the parties to litigation. By contrast, para 1 of Sch 1A to the 1974 Act confers powers on the Council of the Law Society to impose sanctions on solicitors. If there is a complaint about fees, the Law Society can determine the amount of costs to which a solicitor is entitled, or award compensation not exceeding £5,000.
I accept Mr Morgan’s submissions about the benefits to the client of having an estimate. The imposition of the discipline of producing estimates is one of the strategies which has been adopted to contain legal costs, and there is no doubt as to the public interest in avoiding the incurring of unnecessary legal costs. Excessive legal costs imperil access to justice.
Having set the scene, I turn to consider the effect of a failure to give an estimate of costs as required by the code on the contract of retainer between a solicitor and his client. In my judgment, for the reasons given below, that contract is not thereby rendered unenforceable …
… There are a number of textual points which might be thought to support Mr Morgan’s case. In particular, r 15 beings by providing that a solicitor ‘shall’ provide costs information. But, while the word ‘shall’ is often mandatory, particularly when used in legislation, it has, depending on the context, been interpreted on occasion as directory or exhortatory only: see for example R v Immigration Appeal Tribunal, ex Jeyeanthan, Ravichandran v Secretary of State for the Home Dept [1999] 3 All ER 231; [2000] 1 WLR 354. In r 15, for the reasons given below, the word ‘shall’ is not in my judgment mandatory in the sense that non-compliance with the code will always result in a breach of r 15. Rule 15 must be interpreted with the notes that appear immediately following it. It is clear from note (i) that not every breach of the code will result in a breach of r 15. It has to be a serious breach of the code, alternatively there have to be persistent and material breaches. In my judgment this note is an indication that a breach of the code does not of itself render the contract of retainer unenforceable. Mr Morgan has not suggested that the contract of retainer is unenforceable only where r 15 is by virtue of note (i) to be taken to be breached.
Another indication to that effect can be found in para 2 of the code. As one would expect, the code does not require a costs estimate to be given in every case, especially where the instructions represent ‘repeat business’, such as the conveyancing work on identical plots of land. Likewise an estimate is not required where it is impractical or where compliance with the code is at that time ‘sensitive’. I am not clear what situations that last-mentioned provision covers, but whatever it covers depends on an evaluation of the situation by the solicitor. In my judgment, it is unlikely that the code has the effect of rendering contracts of retainer unenforceable according to whether the solicitor makes a correct evaluation of something which is bound to involve questions of opinion and judgment. Accordingly, para 2 of the code is a strong pointer against Mr Morgan’s submission.
Mr Morgan has emphasised the strong policy reasons for costs estimates. Indeed, in any question of statutory interpretation the court is bound to have in mind the purpose of a statutory rule or the mischief at which it is directed, so far as such purpose or mischief can be ascertained. That is not to say, of course, that the court can simply give effect to that purpose, but where the court has to make a judgment about the proper meaning of a statute it is likely to want to consider whether it can by the process of interpretation given effect to its purpose or the mischief to which the statute is directed.
I agree with Mr Morgan that, where a rule is imposed in the public interest, it would be surprising and unlikely if there was no sanction for non-compliance. But, as the Law Society’s written submissions point out, there are disciplinary sanctions for breach of r 15. Under Sch 1A to the 1974 Act, the Council of the Law Society can determine what the fees payable by the client should be and indeed may award compensation up to £5,000: see the extracts from Sch 1A set out above.
Mr Morgan submits that, if a breach of the code renders the contract unlawful, the solicitor is not entitled to any remuneration whatever. Neither the Law Society nor the respondents have contested this proposition. I note in passing one of the reasons why the Law Commission of England and Wales recently provisionally recommended a change in the law on the effect of illegality on contracts is that in general a contract which is unlawful is wholly unenforceable: see its consultation paper Illegal Transactions: The Effect of Illegality on Contracts and Trusts (Law Com no 154) (1999). If Mr Morgan’s proposition is correct, then far from it being a reason for interpreting the statutory scheme in the way Mr Morgan submits, it seems to me to be a reason for the contrary interpretation. This is because in a situation like this the effect of the common law rule is that the receiving party can recover nothing from the paying party even if he has paid his solicitor in full, because he is under no liability to his own solicitor and because the indemnity principle applies. If his solicitor were insolvent, he would not be able to recover his money from him even if he were entitled so to do.
Because the question at issue turns on the true interpretation of the particular statutory framework for costs estimates, I do not consider that it is necessary to set out the various cases on illegality that have been cited to us. For the reasons given above, I reject Mr Morgan’s submissions that the effect of the failure to give a costs estimate is to render the contract of retainer unlawful and unenforceable.”

“There is another argument to which I attach considerable weight. Since the decisions in Re Montgomery Deceased and Re De Vere Deceased, Titles to Property included in the … Estate and in other Estates have been accepted on the basis that names and arms clauses are void for uncertainty in Ireland. A decision now that the clauses involved here were valid would render those titles bad. Although I am not bound by decisions of other judges of the High Court, the usual practice is to follow them unless I am satisfied that they were wrongly decided.”

Section 27(1) of the Act of 1995 states;
“On a taxation of costs as between party and party by a Taxing Master of the High Court, or by a County Registrar exercising the powers of a Taxing Master of the High Court, or on a taxation of costs as between solicitor and client by a Taxing Master of the High Court, the Taxing Master (or County Registrar as the case may be) shall have power on taxation to examine the nature and extent of any work done, or services rendered or provided by counsel (whether senior or junior), or by a solicitor, or by an expert witness appearing in a case or any expert engaged by a party, and may tax, assess and determine the value of such work done or service rendered or provided in connection with the measurement, allowance or disallowance of any costs, charges, fees or expenses included in a bill of costs.”

“On a taxation of costs as between party and party by a Taxing Mater of the High Court, or by a County Registrar exercising the powers of a Taxing Master of the High Court, or on a taxation of costs as between solicitor and client by a Taxing Master of the High Court, the Taxing Master (or County Registrar as the case may be) shall power on such taxation to allow in whole or in part, any costs, charges, fees or expenses included in bill of costs in respect of counsel (whether senior or junior) or in respect of a solicitor or an expert witness appearing in a case, or any expert engaged by a party as the Taxing Master (or County Registrar as the case may be) considers in his or her discretion to be fair and reasonable in the circumstances of that case, and the Taxing Master shall have power in the exercise of that discretion to disallow any such costs, charges, fees or expenses in whole or in part.”

“The High Court may review a decision of a Taxing Master of the High Court and the Circuit Court may review a decision of a County Registrar exercising the powers of a Taxing Master of the High Court made in the exercise of his or her powers under this section, to allow or disallow any costs, charges, fees or expenses provided only that the High Court is satisfied that the County Registrar, has erred as to the amount of the allowance or disallowance so that the Taxing Master, or the Circuit Court is satisfied that the decision of the Taxing Master or the County Registrar is unjust.”

“In considering whether the Taxing Master erred, I must see whether in arriving at his decision he had regard or excessive regard to some factor which he either should not have had any regard to or to which he should have had much less regard. I then have to consider whether there was some significant factor to which the Taxing Master ought to have regard and to which he had either had no regard at all or insufficient regard. Those are examples of errors of principle in consideration of the facts but of course the court must also consider whether the Taxing Master has fallen into error in either law or jurisdiction”.

“If this court finds that the Taxing Master has erred in the sense described, this court then has to address the second question which is whether the taxation was unjust. In relation to any given item in the taxation which is in controversy, the justice or injustice of the decision will be determined by the amount”.

“In discharging its function the High Court inexorably must, if it can, form a view itself of the particular item of costs or the amount it would have awarded in any given situation. Otherwise, there is no basis upon which any conclusion as to “injustice” can exist in the absence of some mistake of principle. I would therefore regard the reasoning of Geoghegan J. as more correct.
There may of course be instances where the court does not feel equipped to offer its own view, particularly in relation to solicitors’ instructions fees, which have always been regarded as an area of considerable difficulty for judges. This may leave the court with no option but to remit the matter back to the Taxing Master where some mistaken principle has been applied or where there is no sufficient material to enable the court arrive at a figure which is proper in the circumstances.
When does an error as to amount become “unjust”?
It seems to me that, in exercising its powers of review under s. 27, the High Court should adopt a similar role and standard to that traditionally and habitually taken by the Supreme Court in reviewing awards of damages, that is to say that it should not intervene to alter a finding of amount made by the Taxing Master unless an error of the order of 25% or more has been established in relation to an item under challenge.”

“I have carefully considered all submissions herein, both written and oral and indeed the comparators put forward in support of what the Defendants consider should be a reasonable brief fee for senior counsel. I have re-examined my notes made in respect of the taxation itself. On that occasion I carried out a detailed examination into the nature and extent of the work done in relation to the brief itself, I had regard for the peculiar and unusual circumstances of how this accident occurred to the Plaintiff. Liability was a major issue and this can be clearly appreciated by reason of the court judgment itself wherein the Plaintiff was found to be 25% contributory negligent. Furthermore, I have had regard to the fact that “the economic issue” was live notwithstanding that the court had already ruled on this particular issue in the McEneaney case. Having carried out the examination and investigation I am obliged to do pursuant to s. 27(1) and, indeed, in complained with the guidance of Kearns J. in Superquinn v. Bray U.D.C., I was and am satisfied that the brief fee allowed on taxation was in all the circumstances of this particular case, reasonable and fair. This objection relating to the quantum of junior counsel’s brief fees being allowed at two thirds of senior counsel fee is novel and has not heretofore been canvassed. It is submitted that junior counsel played a relatively low key role in the conduct of the trial and in these circumstances should not be allowed the usual two-thirds of senior counsel fee. It is a long-established and well-settled custom and practice that junior counsel is entitled to a fee of two-thirds of his leader’s fee. Notwithstanding the fact that senior counsel conducted the examination of the majority of the witnesses in court, itself, junior counsel carries a responsibility in ensuring that senior has not overlooked any particular aspect or element of the evidence or law which is material to the Plaintiff’s case. It is in the recognition of the lesser role performed by junior that he/she is allowed a two-thirds proportion of the fee allowed to senior in respect of both brief and refresher fees.
No compelling evidence or argument has been presented on these objections that I should depart from this well-established custom and practice in existence to date. Junior counsel has to carry out an examination and read into a brief similar and identical to that presented to his leader. Junior counsel is not given any lesser of a brief. He must also take a careful note of all evidence given during the trial. Having considered all the evidence in this particular case and its complexities especially in respect of liability itself, this ground of objection now put forward is unmeritorious and is being dismissed.”

11.1 (a) A barrister is entitled to charge for any work undertaken or to be undertaken by him (whether or not it involves an appearance in court) on any basis or by any method he thinks fit provided that such basis or method is permitted by law and a barrister is entitled to take into account when marking or nominating such fee, all features of the instructions which bear upon the commitment which is thereby undertaken or has been undertaken by him including:

(b) A barrister may not undertake work at a salary.
(c) A barrister is not obliged to accept instructions or a brief without having agreed the fee which he is prepared to accept or without having a reasonable opportunity to consider the fee offered in the light of the nature and extent of the work involved in the instructions.
(d) Where a barrister decides not to accept a brief by reason of the inadequacy of the fee offered, he owes a duty to return the brief promptly to his instructing solicitor.
(e) A barrister may not accept instructions on condition that payment will be subsequently fixed as a percentage or other proportion of the amount awarded.
(f) Where a barrister accepts a brief on which no fee has been marked by the instructing solicitor and where no fee has been agreed in advance, he remains entitled to mark a proper and reasonable fee having regard to the nature and extent of the work undertaken and he is not bound to reduce the fee that would thus be marked by reference to the outcome of the matter.
(g) Where a barrister has accepted a brief on the basis that his fee will be discharged before appearing for his client such barrister is entitled to withdraw from the case in the event that such agreed fee is not paid by the agreed date.
(h) A barrister shall, when so requested, inform a solicitor or client of a fee he will charge if instructed by that solicitor for his client or by a client pursuant to the Bar Council Direct Professional Access Scheme.

“Where such powers are expressly conferred on the Taxing Master by statute, it must follow that the Taxing Master also has a duty to examine the nature and extent of work in any particular case and make his own fair and reasonable assessment on the merits accordingly. This must mean that some supposed “no go areas”, particularly with regard to counsels’ fees, no longer exist and that some principles, expressed in cases such as Dunne v. O’Neill [1974] I.R. 180 and Kelly v. Breen [1978] I.L.R.M. 63, in relation to counsels’ fees are no longer determinative, but merely factors to be taken into account. Of course, the Taxing Master may still follow and adopt these well established principles and criteria when he deems it appropriate, but the Act of 1995 has clearly conferred on the Taxing Master, who has special expertise in this area, all the attributes of a specialist tribunal”

“In my view [the Act of 1995] has made sweeping changes to the manner in which costs are taxed.
Firstly, it is clear that the fees of junior counsel, which were always allowed on the basis of two thirds of those of senior counsel, can now be examined on the basis of the nature and extent of work actually done by junior counsel. That of course can work both ways also depending on whether junior counsel has done more or less work in the case than the senior counsel. The Taxing Master has the power to look at that question now in a way which he did not prior to that enactment.
Secondly, it would seem to me that the level of the appropriate Brief fee for counsel (be it senior or junior, the latter’s being no longer calculated only by reference to the level of the former’s) is now not to be based simply on what a solicitor acting reasonably and reasonably prudently based on his experience in the course of his practice would have agreed, but rather on the basis of what in the opinion of the Taxing Master was fairly and reasonably necessary to be incurred ‘for the attainment of justice or for enforcing or defending the rights of any party’.

… it seems to follow that the Taxing Master will now normally need to exercise his discretion in the matter of fees by looking at the work actually done and making his own assessment as to whether the fees in question were fairly and reasonably ‘necessary for the attainment of justice or for enforcing or defending the rights of any party’.”

“It seems to me that in the aftermath of the Act of 1995, any ruling of the Taxing Master must of necessity, set out in some detail an analysis of the work and the reasoning which leads to the determination made in respect of solicitors’ instructions fees and counsel’s fees, particularly having regard to the powers and responsibilities imposed on the Taxing Master by s. 27(1) and (2), and on the court by s. 27(3), given that the court may be called upon to review taxation”.

“… in relation to refresher fees, I accept fully the submission made by counsel for the plaintiff. It seems to me that refresher fees of 3,000 guineas could only be justified and allowed in quite extraordinary and exceptional circumstances where two senior counsel are retained. This case, while difficult and arduous, falls well short of that threshold.
I have only been asked by plaintiff’s counsel to reduce the refresher fees to £2,000 and I will so direct … I have not been asked to reduce refresher fees below this figure, or to consider whether refresher fees should be subject to some reduction if a case goes beyond a certain time”.