Landmark judgement highlights retainer letter lapse

The legal profession was rocked back on its heels last week by Mr Justice Cranston's ruling that no fees were payable by Cawdery Kaye Fireman & Taylor's (CKFT) former client, Gary Minkin, after the firm refused to carry out more work until he had paid his bill.

The case highlights the importance of getting the paperwork right when establishing contractual terms with clients. 

Details of the case can be found in the Law Society Gazette's press release - an extract of which is as follows:

Minkin had instructed the firm to represent him in relation to an occupation and non-molestation order obtained without notice by his wife, from whom he had separated. CKFT gave Minkin a cost estimate of £3,000 plus VAT, and he paid £2,000 on account. The firm then sent the client a retainer headed 'Non-Molestation and Occupation Order', with no other indication of what it was undertaking to do, and stating that its overall costs and expenses would be £3,500, plus VAT. 

The retainer also said the firm would update Minkin in writing if it appeared that the cost estimate may be exceeded. After the first hearing, the firm sent Minkin a bill for £5,462.50. 

When Minkin questioned it, CKFT said the increase was largely a result of extra work, because his wife had unexpectedly rented out the matrimonial home. 

Minkin said he could not pay the fees until he had a costs order against his wife. After further correspondence, the firm said it could not continue to act because of the outstanding payments. 

The costs judge held that the firm's refusal to continue to act without payment was a repudiatory breach of contract. He said the firm was not entitled to any costs, and had to refund all the fees that Minkin had paid so far, except for counsel's fees. 

Dismissing the firm's appeal, Cranston said: "The outcome may seem harsh, but the fact is that it should have been made clearer in [the] retainer letter as to the nature of the engagement. The firm should have complied with the terms in its retainer letter and standard terms of business, and informed the client in writing that the costs estimate may be exceeded." 

Martin Pollins, Managing Director of Bizezia said: "This is precisely the sort of situation that we anticipated when we developed the Contract Engine Client Care system for lawyers.  The system features a comprehensive suite of 200+ fully-editable engagement/client care letter templates for lawyers together with market-leading terms and conditions."

Source: www.lawgazette.co.uk/news/harsh-judgement

Ends This announcement was featured in EziaNews on 4th March

Notes

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