CPR 46.9(3): Informed Consent In Solicitors Act Detailed Assessments

Informed Consent

Master Victoria McCloud (sitting as a Deputy Costs Judge in the SCCO) determined preliminary issues in the course of a detailed assessment proceeding under the Solicitors Act 1974, namely:

  • whether the entirety of the solicitors’ fees were incurred with the client’s consent in the sum claimed; or, alternatively
  • if not whether at least the level of success fee was incurred with consent.

The dispute centered around the client’s alleged understanding of the agreed settlement in the underlying litigation.

It was the solicitors’ case that the client had consented to settlement of the underlying claim in the sum of £8.6m of which £3.6m had related expressly to its costs. As such, the client had consented to the level of fees sought, which had been paid in full.

Accordingly, the solicitors claimed that they were entitled to the benefit of the presumption in CPR 46.9 that their fees were reasonable in amount and reasonably incurred.

The client sought to challenge the costs claimed. Relying on the decisions in Macdougall v Boote Edgar Esterkin (a Firm) [2001] 1 Costs LR 118 and Herbert v HH Law Ltd [2019] EWCA Civ 527 it alleged it did not provide approval of the settlement or, if it did, such approval was not ‘informed’ within the applicable case law.

It was the Claimant’s essential case that its understanding of the underlying settlement was that this was for a global amount of £8.6m. It had not been ‘informed’ that £3.6m of this sum related to its costs and, as such, there was no restriction on its right to challenge and seek reductions to the same.

Preferring the evidence of the solicitors, Master Victoria McCloud found that the client had understood and agreed the settlement which had “unequivocally” included £3.6m for his costs. Accordingly, the client had given informed consent and the solicitors were entitled to the benefit of the presumption in CPR 46.9(3).

“This case represents a commonplace situation where negotiation takes place which is said to lead to a settlement in which a fixed sum of costs will also be paid to Mr H TV to discharge its liability for costs… the question here for me is not, strictly, what the terms of settlement were with ITV2 but rather whether when Mr Bateman sought and obtained instructions from Mr Hendricks to put forward figures based on £3.6m costs and £5m damages, Mr Hendricks was aware and consented, and whether that and the rest of the context suffices to bring rule 46.9 into play, which I find in this case it does.”

Although academic in light of her decision on settlement, the Master also found that client had given informed approval in respect of the 100% success fee claimed by the solicitors.

“I find that Mr Hendricks received a full copy of the CFA at the meeting. Mr Hendricks then signed it knowing its contents… it is implicit from Herbert (reading para 48 and 53 together) that where a success fee is set on that traditional basis, and the essential terms are set out in a document or explained to the client before signing, then the client’s agreement to that CFA will constitute approval for the purposes of engaging the presumptions at CPR 46.9(3)(a) and (b).”