The back of the queue

This post first appeared as an article in the February 2017 issue of Litigation Funding magazine.

As 2017 opens, despite predictions that the Brexit process would absorb the attentions of lawmakers and divert scarce resources away from the dry and dusty terrain of costs reform, to greener European pastures, there are a significant number of reform projects under way.

First the misleadingly entitled “Reforming the soft tissue injury (whiplash) claims process”, secondly the imminent and overdue consultation on fixed costs in clinical negligence claims, thirdly Jackson LJ’s further report into fixed costs and fourthly the move to a digital bill of costs in October 2017.

However seemingly left high and dry, despite the flood waters of reform flowing, remains the vexed question of amending the current regime for Damages Based Agreements (DBAs) prescribed by the Damages Based Agreements Regulations 2013 made under section 58AA of the Courts and Legal Services Act 1990.

That this reform is sorely needed, is apparent to me from the increasing trickle of cases which come across my desk, where the shortcomings, failings and drafting infelicities of the current Regulations are manifest. It is salutary also to note both that there are no decided cases on the Damages Based Agreements Regulations 2013 and also that the Law Society has produced no model DBA.

A few examples of some of the problems will suffice. As is well known, the government declined to give lawyers what they really wanted, which was a form of hybrid Conditional Fee Agreement (CFA), whereby the lawyers would be able to recover costs from the losing party to litigation and a success fee, calculated as a percentage of the damages recovered by the client.

Instead the “Ontario” model was adopted, whereby the client agrees to pay a percentage of the damages recovered, and then in turn is able to deduct from the payment, the amount of costs recovered from the other side and retained by his lawyer.

The first problem that this creates is a conceptual one: what costs are to be credited against the payment, if a client has entered into multiple DBAs, with for example a solicitor and counsel, or a DBA with a claims management company and a further CFA with a solicitor’s firm? Is it the totality of the costs recovered from the other side? Or just the costs peculiar to each “representative”? Given that claims management companies “costs” will not be generally recoverable from the other side to litigation this creates real doubt as to the client’s liability.

Secondly, because the payment agreed under the DBA, acts as a cap for the purposes of the indemnity principle on costs recoverable from the losing side per rule 44.18 CPR, the suitability of the DBA for litigation which takes a surprising turn, may change overnight. A £3000 claim for example, funded by a DBA with a provision for payment of 25% of damages recovered, would cap any recoverable costs at £750. This would be a good deal for a solicitor, if the case settles after a dozen letters have been written.

It could prove an unfortunate bargain, if proceedings need to be issued, fraud is raised as a defence, and a low value case proceeds as a multi-track claim. Although the retainer may be capable of novation in such circumstances, should the client agree, a further layer of needless complexity will need to be addressed to ensure retainer issues are not problematic at the end of the case.

Thirdly, do you trust your client? If the client has entered into a DBA and as things get tougher, in prosecuting the claim, changes his mind, and no longer wishes to proceed with the claim, he can end the DBA. Whilst the client can end the agreement, unless it concerns an employment matter, then the Regulations give the solicitor no facility to send the client a bill for early termination. The Regulations are silent as to the client’s liability in those circumstances: but given that regulation 4 prescribes what payments can be made and the only payments that can be made, the solicitor is likely to be horribly exposed.

An unintended consequence of the introduction of DBAs, which can be utilised by claims management companies (CMCs), as well as solicitors, and which apply to the provision of claims management services, is that they are being deployed to arguably circumvent the referral fee ban, in personal injury litigation. The client enters into a DBA with the CMC, the CMC refers the case to a solicitor who enters into a CFA with the client and no prohibited referral fee changes hands.

But a solicitor cannot ignore the presence of the DBA, or turn a Nelsonian blind eye, to the client’s agreement with the CMC, taking the view that this occurred before his instruction and is none of his business, but is under a duty to advise a client of the nature of the agreement and his obligations.

The sad cases of Beresford and Smith, where solicitors failed to do so and whose relationships with claims management companies were pored over and found wanting, are instructive and on point: the decision of the Solicitors Disciplinary Tribunal was upheld by the High Court: Beresford and Smith v Solicitors Disciplinary Tribunal [2009] EWHC 3155 (Admin).

Although the Solicitors Practice Rules have been swept away and replaced by the Solicitors Code of Conduct, I do not think it is the case that the regulatory requirements have eased in the years since this case: far from it, if anything the regulatory net is likely to tighten further both for solicitors and CMCs who will shortly be regulated by the FCA.

There are other flaws with the drafting of the Regulations and the uses to which they might be put: these issues can be divided into drafting issues and matters of policy. These were addressed in a very interesting and useful report from the Civil Justice Council entitled The Damages Based Agreements Reform Project: Drafting and Policy Issues.

The report was published in August 2015 and runs to 145 pages, of closely argued text, dealing with the details of the confusingly named Damages Based Agreements Regulations 2015. These “Regulations” as the report makes clear in its introduction are a set of draft Regulations, provided to the report’s working party, which were intended to be brought into force in 2015, subject to any revisions or amendments flowing from the working party’s report.

In this respect, it is interesting to note what the working party recorded the then government as wishing to achieve in its terms of reference:

In particular, the Government’s intention is ‘substantively to improve the regulatory framework without encouraging more litigation’, and that the overriding objective is ‘to ensure that any  changes we make do not encourage litigation which would not otherwise be taken forward. Given the  similarities in substance between DBAs and CFAs, the Government does not see DBAs are filling  an access to justice gap — rather, they are intended to be an alternative form of funding, perhaps  in niche areas of litigation.’ In stating this, however, Lord Faulks acknowledged that it was a  ‘complex issue’, and that the Government was keen to avoid, so far as was possible, the ‘unintended  consequences’ that may flow from the redrafting of the DBA Regulations.

Reading that passage one comes away with the conclusion that not only was the government of the day reluctant to reform DBAs for fear of the law of unintended consequences, but it had no interest in promoting DBAs as a form of mainstream funding, perhaps seeing the model, as another unwelcome piece of fuel for the “compensation culture”.

Accordingly, given the current zeitgeist, I suspect the excellent 2015 report will remain to gather dust on the shelf for quite a while to come. DBA reform, is, in Mr Obama’s memorable phrase “at the back of the queue”.

A copy of the article as originally published can be found here: The Back of the Queue PDF

The top 5 ways your solicitor rips you off

What do you think of the title to this post? Does it catch your attention? Admittedly it is not blessed with the same power and venom possessed by the phrase “Enemies of the People” but it both catches the attention and has power to shock.

However the title was not  devised by me. Rather it reflects the a marketing wheeze devised by a company that had spotted a perceived gap in the market for advice  in relation to solicitor-own client assessments under the Solicitors Act 1974. The aggressive tone of the advertisement led to a complaint to the Advertising Standards Authority, which was upheld: you can read the report here: https://www.lawgazette.co.uk/practice/-your-solicitor-rips-you-off–cmc-told-to-pull-provocative-ad/5055869.article

The accompanying video to the advertisement still lingers palely (and amusingly) in cyberspace on Youtube, with an earnest presenter providing an explanation of what wicked creatures solicitors are.

In truth few professions are more regulated than the legal profession, and rightly so given the quasi-monopoly it has over litigation and the need to ensure that the public interest is protected.

The history of regulation and in particular constraints upon what lawyers may charge their clients is long and goes back centuries before the enactment of the Solicitors Act 1974.

A fairly basic safeguard, is a statutory requirement that when a solicitor levies a bill, upon which they may take legal action if it is not paid, that bill must contain a sufficient narrative of what work has been done, and what the client is being charged for, so that it constitutes a “proper” bill. Unless and until such a bill is served, no action can be brought.

As noted in the case of Ralph Hume Garry v Gwillim [2002] EWCA Civ 2002 the origins of the requirement that a solicitors bill should have a narrative, can be traced back to Georgian times and the Act for the better Regulation of Attorneys and Solicitors, 1729, 2 Geo. II. c 23, section 23

As early as that time there had been a bar on the solicitor commencing action until the expiration of one month from the delivery of his bill and there were provisions, slightly different provisions it has to be emphasised , for the taxation of that bill. Even then the bill had to be properly delivered and “subscribed with the proper hand of such attorney or solicitor”. The content of the bill received a little more clarification than has since appeared in that it was prescribed that the bill should be:−

“Written in a common legible Hand and in the English Tongue (except Law Terms and Names of Writs) and in Words at length (except Times and Sums) ×”

That may explain the practice of having a narrative account of the work done.

That Act was succeeded by the Solicitors Act 1843 which provided in section 37 as follows:

“No solicitor shall commence or maintain any action or suit for the recovery of any fees, charges, or disbursements for any business done by such × solicitor, until the expiration of one month after such × solicitor × shall have delivered unto the party to be charged therewith × a bill of such fees, charges, and disbursements, and which bill shall either be subscribed with the proper hand of such × solicitor, (or, in the case of a partnership, by any of the partners.

….

Provided also, that it shall not in any case be necessary in the first instance for such solicitor  in proving a compliance with this Act, to prove the contents of the bill he may have delivered, sent, or left, but it shall be sufficient to prove that a bill of fees, charges, or disbursements, subscribed in the manner aforesaid, or enclosed in or accompanied by such letter as aforesaid, was delivered, sent, or left in the manner aforesaid; but nevertheless it shall be competent for the other party to show that the bill so delivered, sent, or left was not such a bill as constituted a bona fide compliance with this Act “

Section 37 gave rise to some titanic battles in the Victorian courts about the taxation of solicitors bills. Keene v Ward (1849) 13 Q.B. 513. That was an action by the solicitors under a bill which contained charges in respect of nine actions in the Court of Exchequer and two in the Common Pleas. It also contained items in respect of two other actions as to one of which the parties were named and the bill was itemised to state, for example, “Instructions to sue 3s. 4d., writ of summons 12s. 6d”. The final charges in the bill did not identify at whose suit the defendant was the client and contained the fascinating description:−

“Attending you on your informing an action had been brought against you, and as to possibility of throwing it over the Long Vacation; and you were to bring me the writ and notice of declaration × 6s.8d.

The defendant objected to the bill submitting it did not satisfy the requisites of section 37. The argument was that because the bill did not state the court to which the business related, no−one could advise as to the taxation of those parts of the bill and if the bill could not be referred for taxation, it was insufficient. Patteson J. delivering the judgment of the court held:−

“In requiring the delivery of an attorney’s bill, the legislature intended that the client should have sufficient materials for obtaining advice as to taxation: and we think that we fulfil that intention by holding the present bill sufficient within that principle: whereas, if we required in respect of every item a precise exactness of form, we should go beyond the words and meaning of the statute, and should give facilities to dishonest clients to defeat just claims upon a pretence of a defect of form in respect of which they had no real interest.

The next case of interest was Cook v Gillard (1852) 1 E. & B. 26. Here the solicitor Mr Cook delivered a bill to his client divided into four parts. The first part was headed “Yourself and Ransom”. It consisted of a charge for attending the defendant and consulting as to slanderous reports; and then, under a fresh head, “Hilary Term 1846”, there were charges for “Letter before action”, “Instructions to sue”, “Writ of summons”, and “Attending settling”. The amount of the first part of the bill was £2. 19s. 8d. Except insofar as might be inferred from the items quoted there was nothing to show whether the suit of Gillard v Ransom had been pending in any, or which, of the superior courts. The second part of the bill related to conducting the defence of a case at the Middlesex Quarter Sessions and the third part for conducting a prosecution there. The fourth part of the bill was headed “Yourself and Mrs Heydeman”. It contained charges for taking the opinion of counsel on the construction of an agreement, various charges for collecting evidence and making enquiries at Hatton Garden, Tottenham Court Road, and other places well known to be in Middlesex, but which were not stated on the face of the bill to be there; for “Instructions to sue in an action on the case”; for “Writ” and “Service”; for attending in court when on motion by counsel “A rule was made to refer all matters in dispute”; and for attending the reference. The amount of this head of the bill was £122. 8s. 10d. Except insofar as might be inferred from the items quoted there was nothing to show whether the cause of Gillard v Heydeman had been pending in any, or which, of the superior courts. It was contended for the defendant that the first and last parts of the bill were insufficient, as they did not show in what courts the business there charged for was transacted; and therefore that the bill, being one entire bill, was not sufficient as to any part. For the plaintiff it was contended that the bill was sufficient for the whole; or, if not, that it was divisible and good pro tanto.

Lord Campbell C.J. delivered the judgment of the court. He referred to Ivimey v Marks (16 & W.) 843 in which the rule was laid down that a charge for an item in an action, without specifying in what court the action is brought, rendered the bill bad, the reason being that the client ought to be enabled by the bill to obtain advice as to taxation without the need of further question. The Lord Chief Justice pointed out section 37 of the 1843 Act and said:−

“No requisites for the bill are particularised: there is no requirement that the court should be specified: and the section further declares that the plaintiff is not bound in the first instance, in proving a compliance with the Act, to prove the contents of the bill delivered; but it is presumed sufficient unless the defendant proves that it is not such a bill as constitutes “a bona fide compliance with this Act.” The defendant here does not prove that any further information was practically wanted for taxation, or suggest that the name of the court in which the two writs of summons were issued would have been of any use to him: nor does he contend that the Act has not in this case been bona fide complied with, unless the arbitrary rule be deduced from the cases above mentioned, that the name of the court as to every item is indispensable, can be maintained. Now this rule, as applied to the existing statute, appears to have originated in a mistake: it was first introduced by judges applying the provisions of stat. 2 G. 2, c 23, s.23; and then there was good reason for it; for the jurisdiction to tax under that statute is given to the court in which the greater part of the business was done; and it was therefore indispensable for the parties and for the taxing officer to be able to assign each item to its appropriate court, before the taxation could be entered upon: moreover at that time the scale of charges in the different courts was different; so that the name of the court was also wanted in order to estimate the amount of charges. But, under the existing statute, if there is any item in any court of law, jurisdiction is given to all the superior courts indifferently; so that in respect of jurisdiction the name of the court is entirely immaterial: and so likewise it is for estimating the amount due, as the scale of charges in all the superior courts is now uniform. The judges, who instituted the rule in relation to the existing statute, adopted it from cases under the former statute, without adverting to the important changes in the law which the legislature had made; and thereby, as we think, contravened the intention of the legislature. If this reasoning is correct, it follows that the rule, which so originated, has been maintained without any useful purpose.”

He analysed a number of cases including Keene v Ward and then said:−

“This has been followed by a very salutary judgment in Cozens v Graham (16 Jurist, 952), where a bill was held valid although the court in which the business was done was not mentioned or described, it being clear that the defendant, knowing the court, did not want the information and only made the objection to evade payment of a debt.

Lord Campbell C.J. held:−

“I think the plaintiff has proved that he delivered such a bill as the statute requires. The statute, it is to be observed, requires the delivery of a bill of fees, charges and disbursements, but does not specify further what its contents shall be. I agree, however, that the bill must disclose on the face of it sufficient information as to the nature of the charges. I adopt the rule as to this, laid down in Keene v Ward  and in Cook v Gillard.The view taken by my brother Patteson in Keene v Ward seems very sensible.

He went on to say:−

“Complaints have sometimes been made that solicitors are not at liberty to recover the fair remuneration for their services as freely as any other person. It may be necessary to subject them to some regulation; but they have just ground for complaint if those regulations are vexatious, preventing the fair recovery of a just amount. I do not think that the legislature intended to throw on the solicitors the burthen of preparing a bill such that another solicitor on looking at it should, without any further statement, see on the face of the bill all the information requisite to enable him to say the charges were reasonable.

The principles to be derived from these cases were summarised by Ward LJ in his judgment in the Ralph Hume Garry case as follows:

Against that background the principles to be deduced from those cases appear to me to be these:−

i) the legislative intention was that the client should have sufficient material on the face of the bill as to the nature of the charges to enable him to obtain advice as to taxation. The need for advice was to be able to judge the reasonableness of the charges and the risks of having to pay the costs of taxation if less than one−sixth of the amount was taxed off.

ii) that rule was, however, subject to these caveats:−

a) precise exactness of form was not required and the rule was not that another solicitor should be able on looking at the bill, and without any further explanation from the client , see on the face of the bill all information requisite to enable him to say if the charges were reasonable;

b) thus the client must show that further information which he really and practically wanted in order to decide whether to insist on taxation had been withheld and that he was not already in possession of all the information that he could reasonably want for consulting on taxation.

iii) the test, it seems to me, is thus, not whether the bill on its face is objectively sufficient but whether the information in the bill supplemented by what is subjectively known to the client enables the client with advice to take an informed decision whether or not to exercise the only right then open to him, viz., to seek taxation reasonably free from the risk of having to pay the costs of that taxation.

iv) a balance has to be struck between the need, on the one hand, to protect the client and for the bill, together with what he knows, to give him sufficient information to judge whether he has been overcharged and, on the other hand, to protect the solicitor against late ambush being laid on a technical point by a client who seeks only to evade paying his debt.

The Victorian authorities formed a backdrop, to the very issue the Court of Appeal had to decided in the Ralph Hume Garry case: namely the sufficiency of a narrative for the purposes of section 69 of the Solicitors Act 1974 which provided:

(1) Subject to the provisions of this Act, no action shall be brought to recover any costs due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered in accordance with the requirements mentioned in subsection (2);

(2) The requirements referred to in subsection (1) are that the bill

(a) must be signed by the solicitor, or if the costs are due to a firm, by one of the partners of that firm, either in his own name or in the name of the firm, or be enclosed in, or accompanied by, a letter which is so signed and refers to the bill; and

(b) must be delivered to the party to be charged with the bill, either personally or by being sent to him by post to, or left for him at, his place of business, dwelling house, or last known place of abode;

and, where a bill is proved to have been delivered in compliance with those requirements, it shall not be necessary in the first instance for the solicitor to prove the contents of the bill and it shall be presumed, until the contrary is shown, to be a bill bona fide complying with this Act.

The Court of Appeal formulated the test as follows:

70.This review of the legislation and the case law leads me to conclude that the burden on the client under section 69(2) to establish that a bill for a gross sum in contentious business will not be a bill “bona fide complying with the Act” is satisfied if the client shows:−

i) that there is no sufficient narrative in the bill to identify what it is he is being charged for, and

ii) that he does not have sufficient knowledge from other documents in his possession or from what he has been told reasonably to take advice whether or not to apply for that bill to be taxed.

The sufficiency of the narrative and the sufficiency of his knowledge will vary from case to case, and the more he knows, the less the bill may need to spell it out for him. The interests of justice require that the balance be struck between protection of the client’s right to seek taxation and of the solicitor’s right to recover not being defeated by opportunistic resort to technicality.

71. On the facts of this case each bill was obviously and latterly expressly for professional charges. Even though it may have been perfectly obvious, the bills did identify the matter. Crucially for a determination of what was being charged for, the bill identified the period over which the work was being done. These bills may not have said much, but they did say something.

72. Whether the client’s knowledge was sufficient to supplement the lack of full narrative is a matter of fact. The judge held upon a review of the evidence that it was inappropriate to strike out the claim since Mr Ralph had shown a real prospect of establishing at the trial that Mr Gwillim knew all he needed to know about the work and the basis of charging reasonably to be able to exercise his right to seek taxation. I could not possibly interfere with those conclusions which, if the law is as I have stated it to be, were inevitable in the particular circumstances of this case. I would, therefore, dismiss the appeal.

73. I add this postscript for the profession’s consideration so that an unseemly dispute of this kind does not happen again. Surely in 2002 every second of time spent, certainly on contentious business, is recorded on the Account Department’s computer with a description of the fee−earner, the rate of charging and some description of the work done. A copy of the print−out, adjusted as may be necessary to remove items recorded for administrative purposes but not chargeable to the client, could so easily be rendered and all the problems that have arisen here would be avoided. In these days where there seems to be a need for transparency in all things, is a print−out not the least a client is entitled to expect?

A full copy of the judgment can be found here: Ralph Hume Garry v Gwillim [2002] EWCA Civ 1500.

Money and misery

This post first appeared as an article written for the Family Bar in November 2015.

A fast growing area of practice for the Family Bar, is the provision of advice and representation for unmarried couples or others who find themselves engaged in property disputes under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). As such proceedings, despite wishful thinking in some quarters are civil proceedings tried in the County Court or Chancery Division, the normal principles of civil costs apply to them. The purpose of this article is to consider some of the issues such cases throw up.

It is the exception, rather than the rule that an award of inter partes costs is made in family proceedings, such as ancillary relief. In those proceedings, the costs are paid out of the pot of assets that the divorcing couple have. In civil cases, a wholly different ethos applies, namely that the loser pays the winner’s costs and stands his or her own costs. In turn, the ways of funding a client’s costs can be more adventurous than the typical privately paid retainer, or increasingly these days, Public Access contract made directly with a lay client in family proceedings.

As TOLATA proceedings are civil proceedings, the statutory prohibition against the use of contingency fee arrangements (damages based agreements) or conditional fee agreements, the two major types of no win, no fee agreements do not apply. It is perfectly lawful and proper for counsel, to agree to represent a client on the basis of a discounted conditional fee agreement, whereby the client agrees to pay eg £250 per hour if the case is won, or say, £150 per hour if the case is lost.

Although many family lawyers would dismiss such arrangements out of hand, the Chancery Bar is quite adept at working on conditional fee arrangements and their website provides some useful precedent agreements: http://www.chba.org.uk/for-members/library/cfas though it would be a brave soul who acts under a pure damages based agreement, given that there are real problems with drafting an enforceable damages based agreement, or recovering any fees from the client should they choose to end the agreement, before a case is lost or won.  It would be an even braver soul, who decided to act for a client in a Public Access matter on any type of no win, no fee arrangement: given the prohibitions on handling client money and the practicalities of enforcing an award of costs, such agreements can only sensibly be made where there is a solicitor at the other end of it.

All barristers in civil proceedings, these days have to be costs experts: and given a particular feature of these cases, is the costs risk, if a case is lost or costs are not recovered in full, it pays to be aware of what the clients arrangements are with the solicitor, and whether the client has the benefit of BTE (before the event) legal expenses insurance, or has purchase ATE (after the event) legal expenses insurance, and what the limit of that cover is. If a client is horribly exposed to costs risks, a more cautionary approach may need to be taken to the case.

One of the key reforms that the implementation of LASPO 2012 and the package known as the Jackson Reforms, was the introduction of a newly formulated principle of proportionality. What this principle will mean in practice is not yet clear: but on its wording, it means that costs can be reasonably incurred, they can be necessarily incurred to bring a case to its conclusion, but notwithstanding reasonableness and necessity, they can still be disproportionate, and if so, will be disallowed by the court. This principle affects both budgeting and the assessment of costs.

Since 1st April 2013, civil claims issued under part 7 of the Civil Procedure Rules 1998, and most TOLATA cases will be issued under part 7 as they will involve fiercely disputed facts, will be subject to a process of costs budgeting. In advance of the first costs and case management conference, the parties must file and serve the horrendous Precedent H, a form, which sets out the budget for the proceedings.

These forms will then be used by the court to manage the costs of the proceedings, in effect serving as a form of “costs capping lite”. It is essential to consult with an instructing solicitor, prior to the form being completed, as to what figures for counsel’s fees will be included in the precedent H: because if those figures prove to be unrealistically low, then any excess fees may not be recoverable from the losing side.

It has been wisely observed, that there are no winners in family proceedings. At the conclusion of a civil case, there will be a winner and there will be a loser, someone whose claim has succeeded if only in part, and someone who has lost. It is at this point, that part 44 of the Civil Procedure Rules 1998 comes into play.

The court has a structured discretion as to how it will deal with the costs of the proceedings. The starting point is as set out in rule 44.2(2): the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, though the court may make a different order.

Pursuant to rule 44.2(4) the court will have regard to all the circumstances, including the conduct of the parties, degrees of partial success and most particularly any admissible offer to settle, of which the most important variety of offer, will be a part 36 offer.

Costs can be awarded on the standard or indemnity basis: the standard basis means such costs are subject to the criteria of reasonableness and proportionality and the burden is on the receiving party to justify those costs: on the indemnity basis, the only criteria is whether the costs are reasonable and the burden of proof lies on the paying party to show they are unreasonable.

Each and every case, should have at least two part 36 offers, one made by the defendant and one made by the claimant, which reflects their realistic case, rather than their best case, or the open case alleged on the pleadings. I would go so far as to say, that a lawyer who does not advise on an appropriate part 36 in good time before a trial, is skirting with professional negligence and failure to advise a client on the risks posed by an opponent’s part 36 offer, certainly is prima facie negligent.

The effect of a well pitched part 36 offer can be devastating in terms of costs consequences, and is of a magnitude of effectiveness, far greater than the familiar Calderbank offer. Part 36 was comprehensively revised and updated in April 2015.

Part 36 has nothing to do with principles of contract law: it is its own self contained procedural code. Part 36 offers can be made in respect of any issue in proceedings: and at any time, before proceedings are started, or in respect of an appeal.

Should a claimant succeed in beating her own part 36 offer at trial, she will receive indemnity costs from a point in time 21 days after the offer was made, interest on those costs, part 36 enhanced interest and an additional amount: a penalty figure of 10% of the damages awarded.

For a defendant, making a part 36 offer, may be the only practical way, they can protect themselves at trial. Should a claimant fail to beat a defendant’s part 36 offer, then notwithstanding a degree of success at trial, she will be ordered to pay the defendant’s costs, from a point in time 21 days after the offer was made.

When drafting part 36 offers, careful consideration must be given to the form, as if a part 36 offer does not comply with the requirements as to its form and content prescribed by rule 36.5, it will not be an effective part 36 offer, and will take effect, if it does at all, as a mere offer to settle.

Acceptance of a part 36 offer made after proceedings have commenced, will serve to automatically stay those proceedings and create a deemed costs order in favour of the party accepting the offer.

It is worth reiterating again, that a claimant who beats her own part 36 offer at trial, will be awarded indemnity costs, and the principle of proportionality will not apply: when costs come to be assessed this can be of the utmost importance.

If a party’s claim for costs is less than £75,000 then in the first instance these will be assessed on paper, by the District Judge. If more, then by a traditional detailed assessment. In either case, in order to maximise recovery of costs, it is a good rule of thumb that if counsel’s fees are more than £5000 for counsel to write a note for the court’s benefit setting out what work was done, and why in order to flesh out the fee notes most clerks bang out: these may in their own way, like Japanese brush paintings, be beautiful in their sparse simplicity, but if lacking in detail might not be regarded as helpful by the District Judge.

Quis custodiet ipsos custodes?

Many of my colleagues at the Bar believe that I spend my days with an abacus, counting out 6 minute units of time, and the minutes of my own life in coffee spoons.

Far from it. As I have frequently observed, the law and practice of costs and litigation funding throws up more problems of fraud, negligence and professional regulation than any other sphere. Part of my work involves the law relating to the regulation of claims management companies, some of whom burn “white hot” in terms of the acceptability of their practices.

One case that I dealt with some years ago concerned a man who set up as an unregulated claims management company, systematically targeting disabled people, who often had very sound claims for disability discrimination and exploiting their claims for profit.

Earlier this year, long after the hearing I dealt with at Central London County Court in 2012, he was sent to prison.

The facts of the case are set out here:

http://www.disabilitynewsservice.com/ministry-of-justice-failure-may-have-exposed-hundreds-to-fraudsters-activities/

The case illustrated to me two particular points.

The first was the comprehensive net of regulatory provisions which forbade such activity.

First there are the provisions which preclude people from pretending to be solicitors. Section 20 of the Solicitors Act 1974 (as amended by the Legal Services Act 2007 on 8th March 2008) states that no unqualified person may act as a Solicitor and any person who contravenes this prohibition is guilty of an offence and liable on conviction on indictment to imprisonment for a term of up to 2 years or to a fine or both.

Section 21 of the Solicitors Act 1974 catches an unqualified person who wilfully pretends to be or takes or uses any name title additional description implying that he is qualified or recognised by law as qualified to act as a solicitor and provides that he shall be guilty of an offence and liable on summary conviction to a fine.

Secondly, there are the provisions which provide criminal sanctions for unregulated persons, carrying out litigation or exercising rights of audience. Section 12 of the Legal Services Act 2007 establishes a number of reserved legal activities including inter alia the exercise of a right of audience and the conduct of litigation and makes them subject to statutory regulation. Section 13 provides that the question as to whether a person is entitled to carry on an activity which is a reserved legal activity is to be determined solely in accordance with the provisions of this Act and a person may only carry on such an activity if the person is authorised or exempt within the statutory scheme.

Section 14 of the Legal Services Act 2007 establishes an offence for a person to carry on an activity which is a reserved legal activity unless that person is entitled to carry on the activity such offence being punishable on summary conviction to a term of imprisonment of up to 12 months or a fine or conviction on indictment to a term not exceeding 2 years or a fine or both.

Section 17 of the Legal Services Act 2007 creates a further offence for a person wilfully to pretend to be entitled to carry on any activity which is a reserved legal activity when that person is not so entitled or with the intention of implying falsely that that person is so entitled to take or use any name title or description.

Pursuant to Section 18 and 19 of the Legal Services Act 2007 the Act further defines who are authorised persons and who are exempt persons.

Schedule 2 of the Legal Services Act 2007 the conduct of litigation is defined to mean the issuing of proceedings before any Court in England and Wales, the commencement prosecution and defence of such proceedings and the performance of any ancillary functions in relation to such proceedings such as entering appearances to actions.

Thirdly, any fee arrangements are likely to be void and unenforceable, in this context. Fee arrangements provided by non-qualified persons, unlawfully conducting litigation on a “no win-no fee” basis, are usually unlawful contingency fee arrangements and void at common law and contrary to and prohibited by the statutory scheme for Conditional Fee Agreements set out in the Courts and Legal Services Act 1990.

Finally, there are the provisions which apply to the provisions of claims management services. Perhaps most significantly, by Section 4 of the Compensation Act 2006 a person is prohibited from providing regulated claims management services unless he is authorised or exempt or a waiver has been granted or he is an individual acting otherwise than in the course of a business.

Pursuant to Section 7 of the Compensation Act 2006 a person commits an offence if he contravenes Section 4 and is liable on conviction on indictment to imprisonment for a term not exceeding 2 years or to a fine or to both or on summary conviction for a term of imprisonment not exceeding 12 months or to a fine not exceeding the statutory maximum or to both.

The Compensation (Regulated Claims Management Services) Order 2006 Regulation 4 provides that services of the kind specified are prescribed in relation to the making of a claim of a kind described in paragraph 3 or in relation to a cause of action that may give rise to such a claim.

Under Regulation 4(3) the kinds of claim include claims for personal injuries as defined by the Civil Procedure Rules 1998 which includes any claim which may give rise to a claim for inter alia a mental illness such as depression or “damages for a mental impairment” which would include an award for injury to feelings or in respect of claims in relation to employment including discrimination claims.

The second point that struck me about the case was that all these measures, providing consumer protection to the public were effectively worthless, if, there was no enforcement of them by the public authorities: leaving in this case a vulnerable section of the public exposed for many years to the actions of a criminal and without access to justice.

Bad bargains

In recent years there has been a growing tendency to consolidation in the personal injury marketplace, with many firms and their caseloads being acquired in whole or in part by other firms. The contexts in which this process has been occurring are legion.

Firms may have decided to cease doing personal injury work because of the reforms made by LASPO 2012, they may have dissolved due to the breakup of a partnership, sadly, some of them may have entered into an insolvency situation, due to a rising costs base and declining revenues.

The acquiring firm will wish to know what the value of the business is that it is acquiring or at the very least, the value of the work in progress of the cases that it is purchasing. Such a purchase is always inherently risky, but I would identify that there are a number of particular types of risk, which are peculiar to the personal injury market, and which at the current time are perhaps under appreciated by the purchasers of law firms.

Risks can be identified to arise from three particular sources. The first is the risk arising from clients who wish to challenge the amount of costs that they have agreed to pay to their own lawyers, a particularly pertinent consideration in a regime of solicitor-own client success fees paid out of damages. This deserves a post of its own.

I note with unease that many firms of solicitors regularly and by default charge a 100% success fee, as a matter of course, without regard to whether this can be justified on the facts of a particular case, whether it constitutes an item of unusual costs, and whether the client is giving informed consent with the requirements of rule 2, of the Code of Conduct firmly in mind.

Risks lying quiescently in the files from this quarter, may serve both to decrease the ostensible value of the work in progress and raise the spectre of litigation or complaints, consuming precious time and resource in dealing with disgruntled clients, the Solicitors Regulation Authority and the Legal Ombudsman.

The second source of risk, is the risk arising from inter-partes costs challenges made by paying parties: in a real sense those solicitors who make a living from personal injury litigation, do so by reason of the miscalculation of insurers whose failure to identify and settle all claims at a pre-litigation stage generate significant costs for claimants’ lawyers.

The insurers in turn will utilise all available arguments to decrease the amount of costs claimed by lawyers, including challenges to the solicitors retainer and its enforceability.

Judging the prospect of success on inter partes costs challenges is itself an art. The principal argument in this respect at the moment, is the ongoing doubt as to the assignability of conditional fee agreements, but there are refinements to this argument relating both to the unwitting termination of conditional fee agreements by incautiously worded letters and the construction of artificial principal-agent relationships, to seek to circumvent the stringencies of LASPO 2012.

The third and the most dangerous area, relates to the regulatory risk, that a solicitors business model, may infringe the Code of Conduct, leading to action by the Solicitors Regulation Authority, with disciplinary sanctions being pursed before the Solicitors Disciplinary Tribunal. An obvious area of risk, relates to the referral fee ban, and the acquisition of cases.

In this respect, many solicitors still take cases from claims management companies(CMCs), under “LASPO compliant marketing agreements”: but do so in the context of clients who have signed up to Damages Based Agreements (DBAs) with the claims management companies.

This can be no more or less than a transparent attempt to circumvent the referral fee ban, with instead of the solicitor paying the client a fee out of costs, the client paying a fee out of damages. The solicitor may also have agreed to send the CMC a cheque for 25% of the relevant heads of damages.

Such an arrangement is problematic in the extreme. It seems reasonably clear under the Damages Based Agreements Regulations 2013, that the only fee a client is liable to pay a CMC is up to 25% of the appropriate heads of damages, net of the costs the client receives from the paying party.

It matters not that the costs accrue to the solicitor, rather than the CMC. In most cases, this will mean that no fee is due at all to the CMC. A solicitor who fails to spot this, advise the client of the position or even worse send a cheque to the CMC does so at his peril.

Moreover a solicitor may not turn a Nelsonian blind eye, to the client’s agreement with the CMC, taking the view that this occurred before his instruction and is none of his business, but is under a duty to advise a client of the nature of the agreement and his obligations.

The sad cases of Beresford and Smith, where solicitors failed to do so and whose relationships with claims management companies were pored over and found wanting, are instructive and on point: the decision of the Solicitors Disciplinary Tribunal can be found here: 9666-2007 – Beresford & Smith and the High Court decision upholding the Tribunal’s decision can be read here: Beresford v Solicitors Disciplinary Tribunal High Court.

Although the Solicitors Practice Rules have been swept away and replaced by the Solicitors Code of Conduct, I do not think it is the case that the regulatory requirements have eased in the years since this case: far from it, if anything the regulatory net is likely to tighten further both for solicitors and CMCs who will shortly be regulated by the FCA.

Principals, agents and Conditional Fee Agreements

As is well known, one of the effects of LASPO 2012 and the removal of recoverable success fees and ATE premiums has been to cause firms to leave the personal injury market, or more sadly, to cause many well known and well regarded firms, to enter into insolvency procedures.

When their work in progress is sold on, including the retainers made on a conditional fee agreement basis, there are a number of ways by which this transaction of the sale of work in progress can take place.

Perhaps the most familiar, is the attempt to assign conditional fee agreements, a concept which has proved problematic, given the number of recent cases litigated over this point in the County Court and SCCO. It will be some time yet before the Court of Appeal gives a definitive answer to the question of whether a conditional fee agreement is capable of assignment.

Another route, which has been utilised, is for the original firm of solicitors and the subsequent firm of solicitors, to declare that they have entered into an agency agreement, whereby the original firm is declared to be the principal, and the subsequent firm acts as their agent, undertaking work on their behalf.

Thus the argument runs, that the original conditional fee agreement with its recoverable success fee remains in place, the subsequent firm’s fees are recoverable as agent’s charges, with the success fee claimable on top in accordance with long established authority and the problems of assignment are avoided.

But will this arrangement work? In particular, if the original firm of solicitors has ceased to exist, or the original firm does no further work on the case, nor act as a principal supervising the agent, it would seem that the arrangement is open to attack on the basis of the doctrine of sham.

The doctrine of sham in its modern formulation is derived from the principle contained in the case of Snook v London and West Riding Investments Ltd [1967] 2QB786 at page 802 where Lord Justice Diplock as he then was said this:

As regards the contention of the plaintiff that the transactions between himself, Auto Finance and the defendants were a “sham”, it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the “sham” which are intended by them to give third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create.

The reason why  the scenario outlined above can give rise to a sham is because in an insolvency situation, the effect of the solicitor ceasing practice and being unable to perform his obligations under the conditional fee agreement would ordinarily terminate the conditional fee agreement or discharge it by reason of the doctrine of frustration. To suggest otherwise, is to argue against the clearly established fact that one party to the retainer, has to all intents and purposes ceased to exist.

If the original firm is still in existence, but has no meaningful role in the litigation, does not exercise supervision and does no work in the case, it is difficult to see how this is a relationship of principal and agent in any real sense:the obligations of a solicitor principal are quite onerous, as set out in a long chain of cases going back to the Law Society V Waterlow Bros and Leighton (1883) 8APP CAS 407 through to Hollins V Russell [2003] 1 WLR 2487 at page 2536 to 2538. If they have not taken place, this lends force to the analysis, that there is no true principal and agent relationship at all.

Where a sham exists, the transaction is either of no effect or the court gives effect to the true relationship that has been established: the difficulty for solicitors is that the likely conclusion on a true construction of the agreement, is that the original firm of solicitors has terminated its retainer and is not entitled to be paid for the work that it has done.

The second firm of solicitors in turn will be acting without a written retainer which complies with the requirements now set out in the Courts and Legal Services Act 1990 and the Conditional Fee Agreements Order 2013, and any implied retainer, or argument that a novation has taken place on the same terms of the original conditional fee agreement, will lead to a conclusion that this latter retainer is unenforceable and again no costs are recoverable under it.

Rule 2 letters and unintended consequences

A recent decision of District Judge Hale sitting in the County Court at Nottingham in the case of Arfan.v.S & A Foods Limited, as a Regional Costs Judge (20th October 2015) is an interesting example of the unintended (but expensive) consequences of loosely drafted rule 2 letters.

The case initially proceeded to a detailed assessment hearing on 6th March 2015, where the hearing was adjourned, the claimant put to his election to disclose his retainer and directions made to permit the investigation of the claimant’s entitlement to costs.

The substantive claim had been for industrial deafness.

The issue arose in this way. The claimant’s claim for NIHL was proceeding to a trial of a preliminary issue of breach of duty. At a late stage, this was conceded. An order for costs was made in the claimant’s favour.

Causation and quantum remained live issues: the claimant subsequently conceded the claim, and discontinued. After a considerable delay, his solicitors commenced detailed assessment proceedings based on the costs order made in the claimant’s favour.

The claimant had proceeded under a conditional fee agreement: a “no win, no fee” agreement made in 2007. There having been “no win” and no compensation recovered, the issue before the court was whether the claimant was contractually obliged to pay his solicitors.

The conditional fee agreement stated:

THIS AGREEMENT is a binding legal contract between you and your solicitor(s). Before you sign, please everything carefully. This agreement must be read in conjunction with the Law Society document “Conditional Fee Agreements: what you need to know”.

And:

Paying us

If you win your claim, you pay our basic charges, our disbursements and a success fee. You are entitled to seek recovery from your opponent of all of our basic charges, our disbursements, a success fee and insurance premium, as set out in the document “Conditional Fee Agreements: what you need to know”.

The client care letter stated so far as is material:

What we need from you

I enclose our standard Conditional Fee Agreement which you have signed. This Agreement is in a form approved by the Law Society and is designed in such a way to enable us to claim the costs against your opponent’s insurers.

And:

Legal costs

We have agreed to do your case on a “no win no fee” basis…

I confirm that if we do not recover any compensation for you, then there will be no charge to you and that if we do recover compensation you will receive that compensation without deduction of more than any shortfall on the insurance premium we take out for you and interest on the loan.

I have explained the Conditional Fee Agreement and how it works to you in detail and I enclose an additional explanatory leaflet.

And:

As our client we do share a common interest with you in hoping for a successful outcome to your case because we do not get paid unless we get compensation for you.

(emphasis added)

The copy of “What you need to know” initially produced at the detailed assessment hearing was the version drafted in 2012 which contained the following term, relied on by the claimant:

If on the way to winning or losing you are awarded any costs, by agreement or court order, then we are entitled to payment of those costs, together with a success fee on those charges if you win overall.

But the retainer was made in 2007. The 2012 document could have had no application to a retainer made in 2007: no other version of that document existed on the Claimant’s solicitors file as a copy document of what was provided to the Claimant, and what terms were contained within it.

The case hinged on the correct approach to construction of the retainer. The correct approach to construction of the solicitor’s retainer was established in the case of Jones.v.Wrexham Borough Council [2008] 1 WLR 1590 where the Court of Appeal noted at paragraph 27:

27 I can see no reason why the court should not look at the whole package produced by the solicitor, the CFA agreement, the rule 15 letter explaining to the client the effect of the agreement, and indeed the insurance policy recommended by the solicitor. In that way it can be ascertained whether, as between client and solicitor, the proper understanding was that (save in the circumstances described in paragraph (5) of regulation 3A) the client will not be liable for any own-side costs whatever the result of the proceedings, save to the extent that they can be recovered from the other side or under the insurance policy. I use the word costs but would emphasise that, as between client and solicitor, it is unlikely that a client will have at the forefront of his mind a distinction between expenses and disbursements or between clients disbursements and solicitors own disbursements.

Accordingly the court accepted that the correct approach was to consider the documents as a whole: the conditional fee agreement, standard terms and client care letter as the retainer.

The difficult facing the claimant in terms of the reliance on a particular standard term incorporated by reference into this retainer were three fold.

First, while the defendant acknowledged the application of the signature rule, and the doctrine of incorporation by reference, there was no proof of what was actually incorporated in 2007.  “What you need to know” is a document which has been through multiple incarnations. It has been amended many times to reflect changes in the regulatory regime over the years. It is also a document that is routinely amended by solicitors, to better reflect their own practices and retainers. No copy of the document lay on the solicitors file.

Secondly, assuming that such a term (1) did exist and (2) was incorporated, it did not avail the claimant’s solicitors. The client care letter contained clear and explicit assurances, that if the claimant failed to recover compensation, he would pay no costs.

Those statements were not mere “puffs”: they were statements which had contractual force, the client care letter plainly being intended to create a “CFA Lite”. The effect of the assurances in the letter was to vitiate the standard term, either due to an inconsistency of terms, or by waiver.

The alleged term in “What you need to know” was inconsistent with the position set out in the client care letter. Per The Starsin [2004] 1 AC 715 where a contract is a standard form of contract to which the parties have then added special conditions, then unless the contract provides otherwise greater weight must be given to the special conditions, and in a conflict between general conditions and special conditions, the latter will prevail.

This principle is further reflected in the more general maxim of contra proferentem, that where these is a doubt about the meaning of the contract, it is construed against he who drafted it. To like effect is regulation 7(2) of the Unfair Terms in Consumer Contracts Regulations 1999. As the term in “What you need to know” was contained in a standard form document, the express provisions contained in the client care letter, should prevail.

Finally, even if the claimant had proved the incorporate of the relevant term in “What you need to know”, the client care letter waived the solicitor’s right to rely upon it.

The client would be perfectly entitled to set up as a defence to any claim under the conditional fee agreement, the terms of the assurance contained in the letter were the solicitor to make a demand for payment.

He could state clearly and categorically, pointing to his lack of compensation, that he was told no costs would be paid in such circumstances.

The concept of waiver in the context of a relationship between a standard printed conditional fee agreement and a client care letter was considered in the Jones case supra.

34 I suggest that any client reading that letter would expect: (i) that unless they withdrew instructions, no fees or expenses would be payable to the solicitors; (ii) that they would not be liable for disbursements, possibly because, as the letter suggests, they would be covered by insurance provided they took out insurance. But the understanding of the client would be simply that no liability would fall on the client. (It is suggested that some form of concession was made in the court below as to the meaning of our services. Since we are concerned with the question of construction of a written contract in relation to which it is not suggested some evidence was produced in reliance on such a concession, in my view the claimant should be free to withdraw the same if it was made); (iii) that any costs which might be ordered to be paid because the case was lost would be covered by insurance; (iv) that the solicitors would be producing a CFA contract and recommending an insurance policy that would produce the above result.

Hughes LJ summarised the position as follows at paragraphs 85 to 87:

85 The letter and the CFA were sent together to the client. The client care letter is an essential part nowadays of the contractual relationship between solicitor and client. This letter purports to explain, and advise upon, the CFA and the arrangement between the parties generally. Although in fact drafted by the claims handlers, it came from and was signed by the solicitors. It begins: The purpose of this letter is to set out the terms of our engagement . . . It enclosed the claims handlers printed standard-form CFA, albeit in rather small print. It referred to the CFA as fully setting out the terms of this arrangement. The printed agreement in turn referred to and had attached to it some standard terms headed Law Society Conditions, albeit without the numbering referred to in the body of the printed agreement. The client was asked by the letter to sign both letter and agreement, and if she had read the agreement she would have found in it a warning that she should read it carefully. It is apparent that the letter and printed agreement traverse much of the same ground, but not in identical terms. The reality is that a lay client will, if she reads the printed agreement at all, at the very least read the two together, and is to be expected to take the letter as an explanation and summary of, and advice upon, the agreement. That position is not altered by the fact that it appears from the letter that the solicitors arranged for one of them to telephone the client to ensure that you understand the contents of the agreement. What was actually said to her on this occasion is not in evidence.

86 I respectfully agree with Waller LJ that the letter and agreement together constitute the CFA. The representations and warranties in the letter induced the signature to both it and the agreement, and once both were signed, as they were, the statutory requirement that a CFA be in writing signed by both parties is satisfied.

87 I also agree that the clear meaning of the letter, to any ordinary lay person putting herself into the hands of a professional solicitor, is that in the absence of default by her and so long as she does not withdraw her instructions, she will not have to bear any liability for own-side costs; if payable at all, they will be covered by insurance. Taken, as they must be, in their context within the letter, which is set out in the judgment of Waller LJ and which I do not repeat, that meaning seems to me to emerge from the following statements: (i) Providing you comply with your requirements under the CFA and do not withdraw instructions, we will not charge you for our services unless we are successful whereupon we will receive our costs from the losing party; (ii) Our disbursements . . . In a case of this nature these fees can be very substantial and if your case is not successful these fees will be met by the insurance; (iii) Other party’s costs and disbursements . . . If your case is not successful you may be ordered to pay the other partys costs which again, for a case of this nature, can be very substantial. If you lose, the insurance will pay any award; (iv) Success fee . . . this success fee is recoverable from the other side upon the successful conclusion of your case however, if all or part of the success fee is disallowed, we waive our right to come to you for the balance which means that there will be no deduction from your damages or a bill for you to pay if any of our own costs are unrecovered; although the last of those statements appears under the heading Success fee the closing words, beginning  which means that, clearly go beyond the success fee and, by their own terms, extend to any of our costs.

He went onto explain how where the letter did not properly reflect the terms of the printed agreement, it was to be treated as a waiver of the printed terms in favour of the assurances in the letter at paragraphs 88 to 90:

 88 For a number of reasons, those clear statements in the letter do not properly reflect the terms of the printed agreement. Mr Morgan has pointed to several ways in which, on the terms of the printed agreement, the client may remain exposed to the risk of having to pay some own-side costs.

89 First, Law Society condition 4 contains a waiver by the solicitors of any claim for own side costs in a won case except to the extent they are agreed or allowed on assessment by the court. As Mr Morgan points out, the waiver does not extend to costs allowed by the court but not paid by the defendants, for example if they become insolvent. Like Waller LJ, I am quite satisfied that the letter constitutes a waiver in such a case of any claim for own-side costs not actually obtained from the defendants. No doubt the solicitors and claims handlers both had it in mind that the defendants would be insured.

90 The same condition 4 refers to the statutory power of the court in a won case to disallow part or all of the success fee as against the defendants but to allow it as between solicitor and client. By the printed agreement, the solicitors thus waive the excess success fee but not if the court rules it payable between solicitor and client. For the same reasons, however, the letter constitutes a waiver whether the court so orders or not.

In the event District Judge Hale found against the claimant on all arguments, not being satisfied that a relevant term had been incorporated as a matter of fact, but even if it had, the printed term giving an entitlement to interlocutory costs had to give way to the particular term in the rule 2 letter, and that the claimant’s solicitors had in the rule 2 letter in any event waived, the right to rely on the standard term giving them an entitlement to interlocutory costs.

Given the prevalence of CFA-Lite in pre-2013 CFA arrangements, I suspect there must still be many cases out there, where a solicitor will have unthinkingly waived their rights through a loosely drafted rule 2 letter, to claim interlocutory costs or to be able to send the client a bill, should the client breach of his obligations and the case founder in consequence.