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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Gill v Heer Manak Solicitors [2018] EWHC 2881 (QB) (30 October 2018) URL: http://www.bailii.org/ew/cases/EWHC/QB/2018/2881.html Cite as: [2019] PNLR 10, [2018] 5 Costs LR 1165, [2018] EWHC 2881 (QB) |
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QUEEN'S BENCH DIVISION
On appeal from the order of Master Brown
in the Senior Costs Office 29 September 2017
giving effect to the judgment of Master Simons delivered on 27.01.2017
Strand, London, WC2A 2LL |
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B e f o r e :
(sitting with assessor, Master Haworth)
____________________
Mr Manjit Gill |
Claimant (Appellant) |
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- and - |
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Heer Manak Solicitors |
Defendant (Respondent) |
____________________
Mr Andrew McGee (instructed by Maya and Co Solicitors) for the defendant (respondent)
Hearing date: 14 March 2018
____________________
Crown Copyright ©
Mr Justice Walker:
A. Introduction and overview | 1 |
B. The Background Facts | 9 |
B1 The litigation | 9 |
B2 The retainer | 13 |
B3 Termination of the retainer | 16 |
C. Relevant legal principles | 19 |
D. The master's judgment and the rival arguments | 24 |
D1 The master's judgment | 24 |
D2 The rival arguments | 25 |
E. Analysis | 29 |
F. Conclusion | 35 |
A. Introduction and overview
1. The claimant's preliminary points heard at the hearing before Master Simons were resolved as follows:
(i) the defendant was entitled to terminate the retainer as a result of the closure of the solicitors practice on 27 December 2013.
B. The Background Facts
B1 The litigation
(1) disclosure and inspection were to be completed during February 2014;
(2) witness statements were to be exchanged on 7 March 2014, with supplemental witness statements served by 21 March 2014; and
(3) all parties were to file and serve skeleton arguments by 29 April 2014.
B2 The retainer
[29] We may decide to stop acting for you only with good reason, for example, if you do not pay an interim bill or comply with our request for a payment on account. We must give you reasonable notice that we will stop acting for you.
[30] If you or we decide that we will no longer act for you, you will pay our charges on an hourly basis and expenses.
B3 Termination of the retainer
9. The first question is whether the Firm is entitled to any payment at all given that it has ceased to practice. As I understand it, this is not a question of fact, but a question of law. I am advised that the cessation of the Firm's practice cannot affect its entitlement to charge for work done before the cessation. I accept that there may be issues about how much it can properly charge, but those issues are not before the court on the preliminary issue. I shall therefore leave my legal representatives to deal with the points of law in the skeleton argument which is to be prepared for the hearing of the preliminary issue.
7. I had a meeting with HM on 5th June 2013, at which I discussed the proceedings, and they agreed to represent me in them. They sent me a "terms of business" letter on 7th June 2013 [pages 1 - 5] which set out the basis upon which they would act for me
8. I expected them to represent me until the proceedings were concluded.
9. The proceedings developed over the course of the following months, and a case management hearing was held on 20th December 2013. At that hearing, which I attended along with HM, the Court set out a timetable for the future conduct of the case [pages 6 - 7]. There were numerous directions, including the matter being listed for a lengthy trial in April 2014.
10. There had been no suggestion whatsoever that there was any difficulty with HM's firm when I met with them at Court on 20th December. In fact I received letters from them dated 24th December 2013 and 27th December which, again, mentioned no difficulties.
11. I cannot now recall precisely how it was communicated to me, but on or shortly after 27th December 2013, I received a communication from HM to the effect that they were ceasing to trade, were closing down or had closed down with effect from 27th December 2013, and would not be able to provide me with any representation at all. A copy of the announcement from their website is at [pages 8 - 11]. I cannot now recall whether exactly the same wording was sent to me by letter or email, or whether I received a telephone call, but the information contained within the website announcement that I have exhibited was in effect the information that was communicated to me on or shortly after 27th December 2013.
12. At this point I simply did not know what to do. I was aware that the trial in my case was fast approaching, and that various steps needed to be dealt with in accordance with the court's directions. I was however deep in my studies so did not immediately make contact with other solicitors, but planned to do so.
13. I was contacted I believe in mid to late January by Mr Shusheel Gill, who had been dealing with my case at HM, to say that he had now found employment at Lexton Law Solicitors. Lexton Law then wrote to me by letter dated 4th February 2014 [page 12]. I signed the form of authority that they sent to me in that letter, and they then acted for me until the case was successfully concluded.
In the majority of cases the firms closed in an orderly manner, dealing appropriately with client files and monies.
C. Relevant legal principles
But it has been held that in such a case a solicitor cannot throw his client over at the last moment which might be ruin to the client, and, even though the solicitor may have good cause for declining to act further for the client, he must give him reasonable notice of his intention to do so.
The result … seems to me to be that, though there may be valid reasons for giving such a notice, if no such notice is given, the contract of the solicitor is an entire contract, and he cannot sue for his costs before the termination of the action.
D. The master's judgment and the rival arguments
D1 The master's judgment
29. The final aspect which seems to me to be of importance is, was there reasonable notice, and this is a much more difficult point, and I accept what Mr McGee says that this must be fact specific in this case. Mr Dunne says that the solicitors have known from October that there was a possibility that their practice would be closed down by the Solicitors Regulation Authority if they could not find insurance in that time, and he says that the solicitors would have known right up until December that they were under threat of closing down, but they still gave no indication to the client that this might be the case. Mr Dunne is right when he says there is no evidence as to what the position was as to whether or not the solicitors were endeavouring to obtain insurance during this time. But I do not accept the point necessarily that the solicitors knew, or the person dealing with the case, who was clearly not one of the partners, knew what the situation was himself and still failed to tell the client that the practice was closing down even though he was dealing with him right up until a few days before the firm cased to trade. And I ask myself at any time would it be commercially sensible for solicitors to warn their client that they might be closing down because they cannot get proper professional insurance. It seems to me that solicitors would be running a very high risk by telling every client that there is a risk that we might be closed down, but we have to give you reasonable notice.
30. Again I accept Mr McGee's point that one has to look at the way the solicitors behaved. They did not give notice, and I can understand the reasons why they did not give any notice, because they could not. It was not until the very last minute, two days before the period they were given by the Solicitors Regulation Authority for them to stop the firm from trading, and they said they were closing down. One has to look at what they then did. They informed the client on their website that the client had to go and get other solicitors, this is the procedure and they have to go to other solicitors and the defendant would make arrangement with these new solicitors. The defendant in this case, once it was contacted by the new solicitors, passed the document on without demanding any payment of their fees so that the client could continue with his case.
31. So I do not accept the submission that no reasonable notice was given in the circumstances of this particular case. As I indicated before, I do think that is it is an appropriate analogy to say that if I find that, given the circumstances of this case, there will always be a difficulty in the case of bankruptcy of a solicitor or the intervention of a solicitors' firm, or the death of a solicitor, to say well this termination was done without notice and, therefore, the solicitors are not entitled to recover any fees.
D2 The rival arguments
(1) The master erred in law by making a finding based on assumptions unsupported by evidence;
(2) the master erred in law because, where no notice is given prior to termination it is incumbent upon the firm to justify why they were unable to inform their client of the need, mid-litigation, to find new representation; and
(3) where, as here, the firm do not make any attempt to explain the circumstances or justify the decision it must follow that the court will find that reasonable notice was not given.
4. The Appeal is of course by way of review, not rehearing. So the question is whether this decision is one which was open to the Master on the facts before him. It will be noted that at the hearing Appellant took points about the lack of evidence as to what Respondent did to seek alternative insurance. However, the Master's decision is not based on evidence as to what steps the Respondent took to secure alternative insurance. Rather, he relies on the commerciality of the decision to keep their difficulties to themselves for as long as possible. He takes the view that this was a reasonable way for them to behave.
5. It is submitted that this is a view which he was entitled to take. It cannot be regarded as being outside the reasonable range of conclusions which he might have reached.
6. Respondent goes further by arguing that Master Simons' decision was not merely permissible; it was obviously correct. No firm of solicitors is likely to see it as commercially sensible to admit that it cannot obtain indemnity insurance until the latest possible date. To do so would be commercial suicide, and it is entirely understandable that Respondent here did not do so.
E. Analysis
F. Conclusion