Kain Knight act for CAM Legal Services Ltd in ‘costs case of the decade’

The Court of Appeal will today (4 October 2022) begin hearing the case of Belsner v CAM Legal Services.

Nick McDonnell of Kain Knight Costs Lawyers are acting for the appellant, CAM Legal Services Lt, together with Ben Williams KC and George McDonald of 4 New Square.

According to Kain Knight, the case has been described as the “costs case of the decade”, and could have profound ramifications for solicitors who charge fees to their clients where those fees are greater than the costs recovered between party and party.

Additionally, the issues the court are to consider go to the heart of nearly every retainer each solicitor and client enters into where the solicitor seeks to charge their client for work done.

The case was originally scheduled to proceed in February and July this year. However, the February date was adjourned after a day’s hearing with further directions to be relisted and heard again from scratch; the Master of the Rolls stated the matters under review were of “very great significance… not just to this case… but to the development of the civil justice system.” In July the case was adjourned again due to illness.

The case concerns the interplay between s.74(3) of the Solicitors Act 1974, the legislation which limits solicitor/client costs to inter-partes costs and CPR.r.46.9(2), the rule which sets out the conditions needed to be met to remove that limitation.

More broadly, the issues the court are set to consider are:

• Does s.74(3) “limitation” apply to claims which use a pre-action protocol where no County Court proceedings are issued?
• Does a solicitor owe its client a fiduciary duty before the retainer is agreed in respect of explaining the limitation and any removal of it, and if so, to what extent?
• Do those fiduciary duties (if applicable) mean the exemption from s.74(3) in CPR.r.46.9(2) only applies if the client gave fully informed consent to paying more costs between solicitor and client than are recovered between party and party?
• If no fiduciary duties were owed and s.74(3) was disapplied, was the term in the solicitor’s retainer (and the Law Society model CFA) which required the client to pay more costs between solicitor and client than recovered between party and party unfair (with reference to the Consumer Rights Act 2015)?
• Did the client give her fully informed consent (if required at all) to the term requiring her to pay more costs to her solicitor than recovered between party and party?