|
OUTER HOUSE, COURT OF SESSION
[2008] CSOH 102
|
|
A675/98
|
OPINION OF LORD MACKAY
OF DRUMADOON
in the cause
DOUGLAS STUART
Pursuer
against
DOREEN BULGER
Defender
ннннннннннннннннн________________
|
Pursuer: Thomson; Gillespie MacandrewW.S.
Defender: not represented
MSM Solicitors and Anderson Strathearn
W.S.: MacNeill; Blacklocks
15 July 2008
[1] This
is an action for damages which arose out of a road accident on the Isle of
Arran on 4 September 1996. The action was raised on 1 June 1998. After sundry procedure the action settled
extra-judicially on 17 October
2000, the date of the proof. The defender agreed to pay damages to the
pursuer, together with the judicial expenses of the action as taxed. A joint minute in appropriate terms was
lodged on 16 January 2001
and given effect to by interlocutor dated 18 January 2001.
In terms of that interlocutor, the defender was found liable to the
pursuer in the expenses of the action. The
pursuer's account of expenses was remitted to the Auditor of Court for taxation.
The pursuer's application for an
additional fee under the provisions Rule of Court 42.14(2) was also remitted
to the Auditor for determination.
[2] The
solicitors who raised the action for damages on behalf of the pursuer, and who
acted for him until settlement of the action was reached and implemented, were
Anderson Strathearn W.S., Edinburgh, who had been instructed by Scholarios,
Solicitors, Paisley. The latter firm of
solicitors is now known as MSM, Solicitors. For ease of reference, I will refer to those
two firms of solicitors as the "pursuer's former solicitors". The pursuer is now represented by Gillespie
Macandrew W.S.
[3] Following
settlement of the action, the agreed damages were paid by the defender. A cheque in settlement of those damages was
sent to the pursuer by his former solicitors, and was cashed by him. An account of the expenses incurred by the
pursuer to Anderson Strathearn W.S. was prepared and subsequently lodged for
taxation with the Auditor of Court (No. 23 of Process). The amount payable in terms of that account of
expenses was subsequently agreed by Anderson Strathearn W.S. and the defender's
solicitors, and was paid to Anderson Strathearn W.S. in August 2001.
[4] The
pursuer's former solicitors then prepared a further account of expenses, which
fell into two parts. This account
of expenses (No. 25 of Process) was lodged in Court on 15 July 2005. Part 1 of the account of expenses related
to the expenses incurred to pursuer's former solicitors in Paisley,
now known as MSM, Solicitors, and Part 2 related to the expenses incurred
to Anderson Strathearn W.S. By this
stage a further firm of solicitors, Blacklock Thorley, was acting for the
pursuer's former solicitors and Gillespie Macandrew W.S. were acting for the
pursuer.
[5] By
interlocutor dated 19 July 2005,
the account of expenses (No. 25 of Process) was remitted to the Auditor of
Court to tax and report in terms of Rule of Court 42.7(1)(a). That interlocutor was granted in response to a
motion enrolled on behalf of the pursuer's former solicitors. According to the Minute Sheet the motion had been
intimated. It was not opposed.
[6] The
pursuer and his new solicitors were clearly aware of what was taking place. On 18 January
2006 Wilkie Law Accountants Limited, who had been instructed by
Gillespie Macandrew W.S. to act on behalf of the pursuer, prepared and lodged
with the Auditor of Court a document entitled "Points of Objection on behalf of
Douglas Stuart to Accounts of Anderson Strathearn and MSM". The taxation of those accounts had been
scheduled to take place the following day.
[7] The
Points of Objection lodged on behalf of the pursuer were in the following
terms:
"It is submitted
on behalf of Mr. Stuart that up until the 16th October 2000,
the day before Mr. Stuart's personal injury action brought against Doreen Bulger was due to come before the Court for Proof he had at
no stage prior thereto been advised that there would be a requirement for him
to meet any shortfall in expenses between those to be recovered judicially from
Doreen Bulger and the actual costs incurred to Messrs MSM, Solicitors and
Messrs. Anderson Strathearn, Solicitors.
It was only at the Consultation on 16th October 2000 that Mr. Stuart
was advised that a proportion of the legal costs were to be met by himself. Mr. Stuart had not been advised that a
proportion of his legal costs would be irrecoverable from Doreen Bulger, the
view of Mr. Stuart is that he had understood that all legal expenses would
be borne by the Defender in his action and that there was never any mention
made prior to 16th October 2000 of any potential liability for
a shortfall in expenses.
Further it is
submitted that there is no written agreement entered into between the
Solicitors and Mr. Stuart that advises him as to the nature and extent of
his own liability in expenses. It is
observed on the final page of both Messrs. Anderson Strathearn
Solicitors and Messrs. MSM Solicitors Accounts that there is included a
percentage representing a contingency fee.
At no stage was Mr. Stuart advised that he would require to meet an
uplift to the Solicitors' fees in respect of a contingency element. Reference is made to Messrs. MSM
Solicitors letter dated 4th October 2002 to Messrs. Gillespie
Macandrew Solicitors, (now representing Mr. Stuart)
wherein they advise that no contingency fee agreement was entered into with
Mr. Stuart, that there was no agreement that they would take a percentage
of any sums recovered nor was there any "no win no fee" agreement. Accordingly there is no basis upon which a
contingency fee can be included. In
addition it is submitted that there was no agreement entered into that the case
was undertaken on a speculative basis. Despite requests from Messrs. Gillespie Macandrew to Messrs. Anderson Strathearn
for production of a copy of any signed speculative fee agreement this has not
been produced. Reference is made to a
letter dated 7th November
2005 from Messrs. Blacklocks to
Messrs. Gillespie Macandrew advising that
insofar as a speculative agreement is concerned Mr. Stuart did not sign
one. In the absence of any written
signed agreements it is not reasonable to include in the Accounts an uplift
representing the litigation having been undertaken on a speculative basis. Further there appears to have been no
agreement between the Solicitor and the client that the Solicitor's fee be
increased on the basis the litigation had been undertaken on a speculative
basis. Reference is made to the Solicitors
(Scotland) Act
1980, Solicitor's Fees, Section 61A paragraph (3).
1. Without sight of the
Solicitors' files a full and proper assessment of the Solicitors' Accounts is
unable to take place. The
representatives of Mr. Stuart are not in a position to properly assess the
sums claimed in the absence of such information. In the circumstances the Auditor is
respectfully requested, subject to submissions presented in support of the
general point of objection to consider the Solicitors' files and to determine what
is a reasonable fee for the work undertaken."
[8] The
taxation proceeded on 19 January
2006. The Auditor taxed both
parts of the account, taxing off various items including a claim on behalf of
Anderson Strathearn W.S for a Contingency/Responsibility Fee (40%) amounting to
г7,502.50 and a claim on behalf of MSM, Solicitors, for a Contingency Fee (50%)
amounting to г12,540.66. The Report by
the Auditor of Court on his taxation of the account of expenses (No. 25 of
Process) was in the following terms:
"EDINBURGH. 11
July 2006. In terms of the
Interlocutor of 19 July 20005 [sic.]
the Auditor taxes at the sum of EIGHT [sic]
SIX THOUSAND NINE HUNDRED AND NINETY NINE POUNDS AND TWENTY PENCE (г86,999.20)
the expenses incurred by Messrs. Anderson Strathen [sic], Solicitors, Edinburgh, and Messrs. MSM, Solicitors,
Paisley, as set out in the Accounts of Expenses No. 25 of Process for
which the Pursuer has been found liable."
Neither the pursuer nor his former
solicitors lodged a Note of Objections to the Auditor's Report.
[9] The
motion enrolled on behalf of the pursuer's former solicitors, MSM Solicitors
and Anderson Strathearn W.S., which came before me, was to approve the Report
of the Auditor of Court dated 11 July 2006 and thereafter to grant decree
in favour of the pursuer's former solicitors against the pursuer in terms
thereof, subject to a payment to account by the pursuer of г58,617.28. I understand that payment to account to
include the agreed sum for judicial expenses which had been settled by the
defender. I also understand that the pursuer
has refused to make any further payment towards the shortfall between the sum
at which the Account of Expenses (No. 25 of Process) has been taxed and
the judicial expenses recovered from the defender. In practical terms the pursuer's former
solicitors now seek decree against the pursuer, their former client, for г28,381.91.
The motion for decree is opposed on the
basis that it would be incompetent for a Court to grant decree in the terms
sought.
[10] In moving the motion, counsel for the pursuer's former
solicitors explained that, after the Auditor of Court issued his Report of 11 July 2006, discussions had
taken place between Anderson Strathearn W.S. and officials within the General
Department of the Court as to the procedure that should be followed. Those discussions had concluded that the procedure
that the pursuer's former solicitors required to follow was that of submitting
a Note to the Extractor of the Court of Session seeking an extract decree. Such a Note had been lodged with Extractor,
although never intimated to the pursuer or to Gillespie Macandrew W.S. Subsequently an extract decree dated 20 December 2006 had been
issued by the Extractor. Counsel for the
pursuer explained that the pursuer's former solicitors now accepted that the
extract decree was a nullity. Against
that background, the pursuer's former solicitors now sought a decree from the
Court for the balance they claimed was due by the pursuer, together with
interest on that sum at the judicial rate from the date of decree until payment.
[11] Counsel for the pursuer submitted that it was competent for the
Court to grant a decree of the nature sought by the present motion. That could be implied from the provisions of
Rule of Court 42.7. Indeed, that
was why Rule of Court 42.7 existed. The Rule provided for the Auditor of Court to
tax an account of expenses which had been submitted by a solicitor to his own
client, for work the solicitor had done in respect of an action before the Court
of Session. It was contended that ever
since the founding of the office of Auditor of the Court of Session in 1806 a
procedure had existed under which a solicitor acting for a party in an action
before the Court of Session could obtain, as part of the proceedings of that
action, a decree against his own client in respect of the fees and outlays
incurred the client had occurred. Whilst
the procedure for obtaining such a decree had varied from time to time since
1806 it had been competent for a solicitor to obtain a decree for expenses
against his own client, within the same action as that in which he had acted
for the client. Reference was made to The Law of Scotland relating to Law Agents:
Begg,
pp.171-2; Expenses in the Supreme and Sheriff Courts of Scotland: Maclaren,
p. 514; The Practice of the Court of Session: Maxwell, pp. 32-33; Expenses
in the Supreme and Sheriff Courts of Scotland: Hastings, p. 126 and various Acts of
Sederunt commencing with the Act of Sederunt of 6 February
1806, to which I shall refer in detail later.
[12] In opposing the motion, counsel for the pursuer advanced
two propositions. Firstly he argued
that the procedure being adopted by the pursuer's former solicitors in seeking
decree in terms of the Auditor's Report was incompetent. Secondly, and in the alternative, he argued that
even it was competent to grant decree against the pursuer in terms of the
Auditor's Report, without further procedure, in the particular circumstances of
this case the Court should not do so.
[14] In introducing his propositions to me, counsel for the pursuer
drew my attention to the fact that the Auditor's Report contains a number of
errors. The instance is incorrect. More importantly the body of the Report is in
error when it purports to record that the pursuer has been found liable for the
expenses incurred by his former solicitors as set out in the account of expenses
(No. 25 of Process).
[15] In developing his first proposition, counsel for the pursuer
did not seek to challenge the competency of the procedure that the pursuer's
former solicitors had followed in having the account of expenses (No. 25
of Process) remitted to the Auditor for taxation in terms of Rule of
Court 42.7(1)(a), nor that adopted by the Auditor prior to, during and subsequent
to his taxation of the account. However,
it was submitted that the purpose of Rule 42.7(1)(a) was to allow the Auditor
to assess the reasonableness of the sums being claimed by a solicitor from his
client, when the solicitor's account of expenses related to items of work undertaken
and outlays incurred by the solicitor in relation to Court of Session
proceedings. That procedure of having an
account remitted to the Auditor could be followed within the process of the
Court of Session action in which the solicitor had been instructed. Rule 42.7 laid down the procedure by
which, and the criteria against which, the taxation of the account should take
place. It did not grant the Auditor any
power to determine any primary issues between the solicitor and his client, relating
to the existence, basis or extent of the liability of the client to the solicitor.
Such issues might include, for example, questions
of personal bar, prescription and mismanagement of the cause. On the contrary the Auditor required to tax
the account in isolation of such issues and determine whether, if the client
was liable to meet the solicitor's account of expenses, the fees and outlays,
which the solicitor sought to recover, were reasonable. Moreover there was no reference within the
terms of Rule 47.2 to the Court to having any power to grant a summary decree
against a party to a Court of Session action and in favour of his solicitor for
the sum brought out following upon the taxation of the account of expenses of
the solicitor of that party.
[16] Counsel for the pursuer informed me that he had been unable to
find any modern text book or other authority which vouched the competency of
the procedure which the pursuer's former solicitors wished to pursue. In particular he had not found any authority which
was dated subsequently to the amendment of Rule 347 of the Rules of Court
1965 by the Act of Sederunt (Rules of the Court of Session Amendment No. 3)
(Taxation of Accounts) 1992. That
amendment took effect from 29 July
1992. Rule 347 of the
Rules of Court 1965 was the statutory predecessor of Rule 42.7 and was framed
in virtually identical terms to those of Rule of Court 47.2.
[17] Counsel for the pursuer referred me to a number of authorities,
which were primarily those that had been mentioned by counsel for the pursuer's
former solicitors. However, he also
referred to Burness v Morris (1849) 2 D 1258 and Court of Session Practice, Macfadyen. Counsel for the pursuer explained that
enquiries, which he and his instructing solicitors had carried out had not identified
any examples or experience of the Court granting a decree of the nature sought
by the pursuer's former solicitors, purely in the basis of a Report by Auditor
of a taxation carried out following a remit under the provisions of Rule of
Court 42.7-(1)(a). Nor was there
any equivalent procedure in the sheriff court.
[18] As far as his second proposition was concerned, counsel for the
pursuer submitted that even it was competent for the Court to grant the decree
sought by the pursuer's former solicitors purely on the basis of the Court's
approval of the Report of the Auditor of Court, I should not do so in the
present case. In addition to the matters
raised on behalf of the pursuer in the Note of Objections lodged with the
Auditor, the pursuer wished to argue that any claim by his former solicitors
had prescribed. In these circumstances,
I was invited to put the case out By Order to discuss further procedure.
Discussion
[19] This motion gives rise to an
interesting question of competency, which has requires researching a number of
Acts of Sederunt relating to the Rules of Court. I begin with the Act of Sederunt of
6 February 1806, which established the office of Auditor of the Court of
Session and introduced a summary procedure by a law agent might recover from
his client the taxed amount of an account of expenses incurred by the law agent
in conducting proceedings on behalf of their client in the Court of
Session. That Act of Sederunt included
the following provisions:-
"and for the
purposes of preventing abuses of the foregoing regulations, and in order to
provide an easy method by which the accounts of practitioners as between agent
and client in this Court may be checked and liquidated, the Lords do further
ordain that it shall be competent either to the client or to the agent to make
a summary application to the Court, or to the Lord Ordinary before whom the
case may depend, or has formerly depended, to get the amount claimed by the
agent remitted to the Auditor of the Court, in order to be examined and taxed according
to these regulations; which remit shall,
on the application having been served upon the opposing party and produced in
Court with a written intimation, be forthwith granted; and the Auditor shall thereafter enquire and
report upon the said account to the Court or the Lord Ordinary; and the party shall have it in their power to
state objections to the report, all in manner above mentioned. And the sum so to be ascertained as the
amount shall alone form a charge against the client. And a precept a decree and a charge of
fifteen days may issue accordingly. ... And it is hereby enacted that these
proceedings may take place either during the dependence of a process, or after
it is out of Court by an extracted decree".
[20] The Rules of Court of the Court of Session were consolidated by
an Act of Sederunt dated 4 June 1913.
Book K - Fees and Expenses. Chapter 1. - Taxation of Accounts of the
Consolidated Act of Sederunt provided:-
"...
2. Summary
Applications for Taxation of Agents' Accounts
(a) It
shall be competent, either to the client or the agent, to make a summary
application to the Court, or to the Lord Ordinary before whom the cause may
depend, or has formerly depended, to get the account claimed by the agent
remitted to the auditor of Court, in order to be examined and taxed according
to these regulations; which remit shall,
on the application having been served on the opposite party, and produced to
the Court, with a written intimation, be forthwith granted; and the auditor shall thereafter inquire and
report upon the said account to the Court, or to the Lord Ordinary, and the
parties shall have it in their power to state objections to the report; and the sum so ascertained, as to the amount
of the account, shall alone form a charge against the client; and a precept or
decree, on a charge of fifteen days, may issue accordingly, in which only
the application, remit, report and interlocutor of modification shall be
inserted.
(b) These
proceedings may take place either during the dependence of a process or after
it has been taken out of court by an extracted decree.
(c) Wherever
an agent or his representatives shall rather choose to raise a summons for
payment of an account, the Lord Ordinary before whom the process may come shall
remit the account to the auditor of Court, and no decree shall be pronounced,
either in absence or after having heard parties, without a report having been
made by the auditor.
..."
[21] The Rules of Court of 1913 were superseded by an Act of
Sederunt of 19 July 1934,
which together with subsequent Acts of Sederunt were consolidated by an Act of
Sederunt dated 18 March 1936.
The consolidated Rules of Court 1936 came
into effect on 1 May 1936.
Rule 17 of Chapter VII of
those Rules was in the following terms:
"(a) It shall be competent to either a client or a
solicitor to make application to the Court, by enrolment in the motion sheet,
to have the account of the solicitor remitted to the Auditor of the Court for
taxation, which remit shall, on intimation of the said motion having been made
to the opposing party, be forthwith granted.
The Auditor shall thereafter report upon the said account to the Court,
and the parties shall be entitled to state objections to the said report in
accordance with Rule 359. The
amount of the account as taxed or altered by the Court shall alone form a
charge against the client, and a precept or decree, on a charge of fifteen
days, may issue accordingly, in which only this report and interlocutor shall
be inserted.
(b) The procedure referred to in paragraph (a)
of this Rule may take place either during the dependence of a process in Court
or following upon an extracted decree of Court.
(c) Notwithstanding paragraphs (a) and (b) of
this Rule, a solicitor or his representatives may sue by summons payment of an
account of expenses due by a client, in which case the Court shall remit the
account to the Auditor of Court, and no decree shall be pronounced, either in
absence or after hearing parties, without a report having been made by the
Auditor."
[22] The Rules of Court 1936, as subsequently amended, were consolidated
by the Act of Sederunt (Rules of Court, Consolidation and Amendment) of 1 July 1948. Rule 360 of the Rules of Court 1948 was
in identical terms to Rule 17 of the Rules of Court 1936.
[23] The Rules of Court 1948, as subsequently amended, were
consolidated by the Act of Sederunt (Rules of Court, Consolidation and
Amendment)1965. Rule 350 of the
Rules of Court 1965 was in the following terms:
"(a) It shall be competent to either a client or a
solicitor to make application to the Court, by enrolment, to have the account
of the solicitor remitted to the Auditor of Court for taxation, which remit
shall, on intimation of the said motion having been made to the opposing party,
be forthwith granted; said Account shall
be fee-funded in accordance with the scale laid down in the Table of Fees. The Auditor shall thereafter report upon the
said account to the Court, and the parties shall be entitled to state
objections to the said report in accordance with Rule 349.
(b) The procedure referred to in
paragraph (a) of this Rule may take place either during the dependence of
a process in Court or following upon an extracted decree of Court.
(c) Notwithstanding paragraphs (a) and (b) of
this Rule, a solicitor or his representatives may sue by summons for payment of
an account of expenses due by a client, in which case the Court shall remit the
account to the Auditor of Court, and no decree shall be pronounced, either in
absence or after hearing parties, without a report having been made by this
Auditor."
[24] It will be noted that the terms of Rule 350 of the Rules
of Court 1965 are similar but not identical to those of Rule 360 of the
Rules of Court 1948. In particular, the
last sentence in paragraph (a) of Rule 360, relating to the amount of
the account, as taxed or altered by the Court, forming a charge against the
client and the issuing of a precept or decree, on a charge of fifteen days, had
been deleted. It must be presumed that those
responsible for drafting and approving the amended rule, which constituted
Rule 350 of the Rules of Court, Rule 350 deliberately intended to
effect a change in procedure. However,
enquiry of and research carried out by the Lord President's Private Office has failed
to disclose any information as to the background to or reasons for the change
that was made.
[25] Rule of Court 350 of the Rules of Court 1965, as
originally enacted, was replaced by a differently drafted rule by virtue of Act
of Sederunt (Rules of the Court of Session Amendment No. 3) (Taxation of
Accounts) 1992. The new Rule came into
force on 20 July 1992. The revised Rule 350 was in the
following terms:
"(1) Subject to section 61A(a) of the
Solicitors (Scotland)
Act 1980, the court may remit to the Auditor of Court for taxation the account
of a solicitor to his client -
(a) where the account is for
work done in relation to a litigation in the Court of Session, on the motion of
the solicitor or the client; and
(b) in any case, in an action
in which the solicitor or his representatives sue the client for payment of the
account.
(2) A motion under paragraph (1)(a) may be
enrolled notwithstanding that final decree in the litigation has been
extracted.
(3) Where a remit is made under paragraph (1)
-
(a) the solicitor shall,
within 21 days, lodge in the office of the Auditor of Court the account,
which shall be in such form as shall enable the Auditor of Court readily to
establish the nature and extent of the work done to which the account relates
and shall detail the outlays incurred by the solicitor together with such
supporting material as is necessary to vouch the items on the account;
(b) the Auditor of Court
shall assign a diet of taxation not earlier than fourteen days from the date he
receives the account and intimate that diet forthwith to the solicitor;
(c) the solicitor shall then,
forthwith, send by first class recorded delivery post, a copy of the account
lodged, the interlocutor remitting the account, and give notice in terms of
Form 73 of the date, time and place of the taxation to the client; and
(d) the Auditor shall report
his decision to the court and shall forthwith send a copy of his report to the
solicitor and to the client.
(4) Either party, provided that he or his
representative has attended at the diet of taxation, may, in accordance with
rule 349, state objections to the report mentioned in paragraph (3)
above, otherwise the report shall be final.
(5) Where the Auditor taxes the account of a
solicitor to his client in respect of the conduct of a litigation on behalf of
the client, he -
(a) shall allow a sum in
respect of such work and outlays as have been reasonably incurred;
(b) shall allow in respect of
each item of work and outlay such sum as may be fair and reasonable having
regard to all the circumstances of the case;
(c) shall, in determining
whether a sum charged in respect of an item of work is fair and reasonable,
take into account -
(i) the complexity of the
litigation and the number, difficulty or novelty of the questions raised;
(ii) the skill, labour,
specialised knowledge and responsibility involved;
(iii) the time spent on the
item of work and on the litigation as a whole;
(iv) the number and importance
of any documents or other papers prepared or perused without regard to length;
(v) the place where the
circumstances (including the degree of expedition required) in which the
solicitor's work or any part of it has been done;
(vi) the amount or value of
any money or property involved in the litigation; and
(vii) the importance of the
litigation or its subject matter to the client;
(d) shall presume (unless the
contrary is demonstrated to his satisfaction) that -
(i) an item of work or
outlay was reasonably incurred if it was incurred with the express or implied
approval of the client;
(ii) the fee charged in
respect of an item of work or outlay was reasonable if the amount of the fee or
the outlay was expressly or impliedly approved by the client; and
(iii) an item of work or
outlay was not reasonably incurred, or that the fee charged in respect of an
item of work or outlay was not reasonable if the item of work, outlay or fee
charged, was unusual in the circumstances of the case, unless the solicitor
informed the client prior to carrying out the item of work or incurring the outlay
that it might not be allowed (or that the fee charged might not be allowed in
full) in a taxation in judicial proceedings between party and party; and
(e) may disallow any item of
work or outlay which is not vouched to his satisfaction."
[26] The most recent consolidation of the Rules of Court came into
effect on 5 September 1994 in terms of the Act of Sederunt (Rules of the
Court of Session 1994) 1994. Under those
Rules the relevant Rule of Court is 42.7:
"Taxation of solicitor's own accounts
42.7-(1) Subject
to section 61A(1) of the Solicitors (Scotland)
Act 1980, the court may remit to the Auditor the account of a solicitor to his
client-
(a) where the account is for
work done in relation to a cause in the Court of Session, on the motion of the
solicitor or the client; or
(b) in an action in which the
solicitor or his representative sues the client for payment of the account.
(2) A motion under paragraph (1)(a) may be
enrolled notwithstanding that final decree in the cause has been extracted.
(3) The account referred to in paragraph (1)
shall-
(a) be in such form as will
enable the Auditor to establish the nature and extent of the work done to which
the account relates;
(b) detail the outlays
incurred by the solicitor; and
(c) be accompanied by such supporting
material as is necessary to vouch the items in the account.
(4) The Auditor shall-
(a) fix a diet of taxation
not earlier than 14 days after the date on which he receives the account; and
(b) intimate the diet to the
solicitor.
(5) On receipt of intimation of the diet of
taxation from the Auditor, the solicitor shall forthwith send to his client by
registered post or the first class recorded delivery service-
(a) a copy of the account to
be taxed;
(b) a copy of the
interlocutor remitting the account; and
(c) a notice in Form 42.7 of
the date, time and place of the diet of taxation.
(6) In taxing an account remitted to him under
paragraph (1), the Auditor-
(a) shall allow a sum in
respect of such work and outlays as have been reasonably incurred;
(b) shall allow, in respect
of each item of work and outlay, such sum as may be fair and reasonable having
regard to all the circumstances of the case;
(c) shall, in determining
whether a sum charged in respect of an item of work is fair and reasonable,
take into account any of the following factors:-
(i) the complexity of the
cause and the number, difficulty or novelty of the questions raised;
(ii) the skill, labour, and
specialised knowledge and responsibility required, of the solicitor;
(iii) the time spent on the
item of work and on the cause as a whole;
(iv) the number and importance
of any documents prepared or perused;
(v) the place and
circumstances (including the degree of expedition required) in which the work
of the solicitor or any part of it has been done;
(vi) the importance of the
cause or the subject-matter of it to the client;
(vii) the amount or value of
money or property involved in the cause;
and
(viii) any informal agreement
relating to fees;
(d) shall presume (unless the
contrary is demonstrated to his satisfaction) that-
(i) an item of work or
outlay was reasonably incurred if it was incurred with the express or implied
approval of the client;
(ii) the fee charged in
respect of an item of work or outlay was reasonable if the amount of the fee or
the outlay was expressly or impliedly approved by the client; and
(iii) an item of work or
outlay was not reasonably incurred, or that the fee charged in respect of an
item of work or outlay was not reasonable if the item of work, outlay or fee
charged, was unusual in the circumstances of the case, unless the solicitor
informed the client before carrying out the item of work or incurring the
outlay that it might not be allowed (or that the fee charged might not be
allowed in full) in a taxation in a cause between party and party; and
(e) may disallow any item of
work or outlay which is not vouched to his satisfaction.
(7) The Auditor shall-
(a) prepare a report of the
taxation of the account remitted to him under paragraph (1);
(b) transmit his report to
the appropriate department of the Office of Court; and
(c) send a copy of his report
to the solicitor and the client."
[27] It will be noted that there are a number of differences between
the terms of Rule 350 (as amended) of the Rule of Court 1965 and Rule 42.7.
of the current Rules of Court. In
particular, Rule 42.7. does not contain a provision similar to the revised
Rule of Court 350(4), restricting the right to lodge state objections to
the Auditor's report.
[28] As far as the competency of the Court granting decree in terms
of the motion before me, I consider some guidance is to be found in Maclaren's Court of Session Practice at page 473,
where the learned author writing in 1916 stated that:
"The law-agent
of a party in a depending cause had also a right to be sisted in order to
recover his expenses in cases where his client had obtained (a) decree for
expenses, or (b) judgment necessarily leading to such a decree, or
(c) where there had been collusion between the parties to defeat his claim."
The passage was cited with approval
in Peek v Peek 1926 SC 565, in which the Second Division recognised the
competency of law agents for one of the parties to an action seeking to be
sisted as parties to the action, with a view to their recovering their
expenses. What is also clear from the
Opinions in Peek v Peek, however, and indeed from the
earlier case on Clark v Henderson (1875) 2 R 428, which is
referred to in Peek, is that the
question of a solicitor's right to obtain an award of expenses against his
client can give rise to issues of fact, which the Court would have to resolve
before pronouncing any decree in favour of the solicitor. The Opinion of Lord President Inglis in Clark, which was issued after all
members of the Inner House had been consulted, made clear that such issues of
fact can be resolved in the original process or in a separate action raised by
the solicitor against his client. As
Lord President Inglis put it at page 430 of the report "There is no
question of competency, whether the claim is disposed in the one action or the
other."
[29] It is appropriate to note that later on the same page of his
Opinion Lord President Inglis doubted the competency of the Court granting
absolvitor in favour of the defender and then sisting a law agent as a party to
an extinct process. On one view
that supports the view that the motion the motion enrolled on behalf of the pursuer's
former solicitors is incompetent, because it seeks a decree against the pursuer
within the process of an action, which is no longer depending before the Court.
However, I have regard to the terms of
the numerous Rule of Court that have applied since Lord President Inglis
delivered his Opinion, I have reached the conclusion that it is competent for
the Court to entertain and adjudicate upon, within the process of an action
raised in the Court of Session, a claim for payment by the solicitor for one of
the parties to the action, of an account of expenses the solicitor has
submitted to his client, even although the action has concluded as far as the
pursuer and defender are concerned, whatever the nature of the final decree as
between the original parties to the action.
[30] Whatever the nature of the changes to the Rules of Court that
have taken place since 1806, or the reasons that may have lain behind those
changes, two matters are clear. Throughout it has been competent for any party
to a Court of Session action or their solicitor to apply to the Court to have
the solicitor's account of expenses against the client remitted to the Auditor
of Court for taxation. And it has always
been competent for such an application to be made and granted, even when the action
in Court of Session, which gave rise to the solicitor's account of expenses,
was no longer in dependence before the Court.
[31] It is also clear that throughout it has been competent for a solicitor
who has acted for a party to an action before the Court of Session to seek
payment of his account of expenses from his client by raising separate
proceedings. For that reason it cannot
be said to be necessary for the solicitor to be allowed to seek recovery of his
expenses within the process of the original action.
[32] In my opinion, it falls with the power of the Court, both at
common law and in exercise of its statutory powers under section 5 of the
Court of Session Act 1988, to regulate its procedure as to allow a solicitor
who has acted for a party to an action before the Court of Session to seek to
recover his fees and outlays from that party. Rule 42.7-(1) would have limited, if any,
practical effect if upon receipt of a Report from the Auditor of Court the
Court could do nothing within the process of the original action to determine
any questions of liability for expenses that may exist between the party to the
action and the solicitor. That is particularly
so when regard is had to the terms of Rule 42.7 -(2).
[33] It my opinion, it is also clear from the terms of the
Rule 42.7 is that if either the solicitor or the client seeks a remit of
an account of expenses to the Auditor, the Court can not only grant a motion to
that effect, it can also determine any issues of liability that may arise
between the solicitor or the client relating to payment of the account of
expenses, no matter at what figure it may be taxed. The Court's power to do so is in addition to
its powers to rule on any objections taken to the Auditor's report by way of a
Note of Objections lodged in terms of the provisions of Rule of Court 42.
4.
[34] I am equally clear that when in an action such as the present
the Court receives a report from the Auditor it is not bound to pronounce a
summary decree against the client and in favour of the solicitor for the sum at
which the account has been taxed, less any payment to account that has been
made. In my opinion, that follows for a
variety of reasons. In the first place
the statutory provisions relating to charges, precepts and decrees, which appeared
in several of the statutory predecessors to Rule of Court 47.2, are not to
be found in the current rule. Secondly
there is the fact that the role of the Auditor under Rule of Court 47.2 is
limited to adjudicating upon the reasonableness of the charges in the account
of expenses. He has no role to play in
adjudicating upon that the client's liability for all or any part of the
expenses claimed in the solicitor's account of expenses.
[35] In my opinion, once the Auditor has reported to the Court on
his taxation of an account of expenses remitted to him under Rule of
Court 42.7 - (1)(a), the further procedure to be followed by the Court
must depend upon the circumstances of the particular case. In the present case, it is clear that the
pursuer disputes that he is liable to pay his former solicitors any outstanding
balance between the figure at which the account of expenses (No. 25 of
Process) was taxed and the expenses that have been recovered from the defender.
It would appear that dispute involves
both questions of fact and questions of law. In my view, the way forward is to fix a By
Order hearing at which I can discuss further procedure with counsel and in
particular whether the pursuer and his former solicitors should lodge Minutes in
process setting out their respective factual and legal contentions in respect
of the issues between them. The action will
be put out By Order for that purpose.
