Solicitors PI: termination of retainer and recovery of costs

In a recent decision the Court of Appeal has confirmed that where a solicitor terminates his retainer prior to the completion of his instructions, he is entitled to be paid for all the work done prior to termination, provided the retainer was terminated for "good reason" and upon reasonable notice. The Court of Appeal did not define what would amount to a "good reason", preferring to leave the issue to be determined based upon the facts of each particular case.  

Richard Buxton (solicitors) were instructed to advise on and pursue an appeal against a decision to grant planning permission in respect of a property located close to Mr Mills-Owens' home. Richard Buxton were subsequently advised by specialist counsel that the appeal had no reasonable prospects of success.  Despite counsel's advice, Mr Mills-Owens instructed Richard Buxton at short notice to proceed to lodge the appeal on four grounds. Counsel advised that only one of the four grounds of appeal was arguable and that it would be counter-productive to raise the remaining grounds. A skeleton argument was prepared by counsel on that basis. The content of the skeleton argument was not acceptable to Mr Mills-Owens and he proceeded to prepare and file his own skeleton argument. Richard Buxton informed Mr Mills-Owens that his skeleton argument was unlikely to find favour with the court and, if he insisted on proceeding along those lines, Richard Buxton would be unable to continue to act and suggested that Mr Mills-Owens obtain alternative representation. Mr Mills-Owens represented himself at the appeal hearing and the appeal was dismissed as "misconceived".

Richard Buxton sought payment of their fees for the work done and, at first instance, the Costs Judge found that Richard Buxton were not entitled to their profit costs, on the basis that they should not have terminated their retainer. On appeal to the Court of Appeal, consideration was given to paragraph 12.12 of the Solicitors Practice Rules 1990 (and the current provisions rules 2.01(2) and 11(3) of the Solicitors Code of Conduct 2007 and guidance) and a solicitor’s obligation to further the overriding objective of the CPR. It was held that, whilst solicitors should not lightly be able to terminate their retainers, they may do so where there is "good reason", which would include circumstances where a solicitor is instructed to put forward arguments that are hopeless. Lord Justice Dyson provided useful guidance that "if an advocate considers that a point is properly arguable, he should argue it without reservation. If he does not consider it to be properly arguable, he should refuse to argue it". Richard Buxton had "good reason" to terminate their retainer and on that basis, despite not completing the "entire contract" between them and Mr Mills-Owens, they were entitled to be paid for all the work done prior to termination.

Further reading: Richard Buxton Solicitors v Mills-Owen [2010] EWCA Civ 122