Solicitor who asked for payments on account had not terminated retainer

Overturning earlier findings, the Court of Appeal said the lawyer’s repeated statements that he would only issue court proceedings for his client subject to funds being made available did not amount to termination.

Cawdery Kaye Fireman & Taylor’s Philip Cooper had been instructed by Gary Minkin in divorce proceedings, estimating the case would cost £3,500 plus VAT.

Complications resulted in Minkin being presented with an interim bill of £5,500, which he refused to pay while asking Cooper to start proceedings.

The solicitor explained he would not take the case further until the businessman, who had already paid £3,000, paid the balance and made a further payment on account for counsel fees.

“Writing to say, ‘Given that you have queried the bill I am concerned that I should not carry out substantive further work for you’, is not to say, ‘I am now suspending further work’. Rather it is a pointed warning that that would happen if money was not paid ‘as we go along’,” Lord Justice Ward said in Cawdery Kaye Fireman & Taylor v Gary Minkin [2012] EWCA Civ 546.

Disagreeing with Mr Justice Cranston’s ruling in the High Court, Ward LJ said the retainer had been terminated by Minkin, meaning that he was still liable for the fees already incurred.

“Not being prepared to act until money is paid shows a willingness to act when there is money on account. This is clear language of suspension […] and I regret that I fundamentally disagree with Cranston J’s view that ‘the language of these emails is redolent of termination, not suspension’,” he said.

He went on: “The message is, ‘I will not do any more work until you pay up’: the message is not, ‘I will not do any more, goodbye’. The continuing correspondence shows that the parties did not proceed upon the basis that it was all over between them.”

Allowing the appeal, Ward LJ said: “The client’s termination of the contract absolves the solicitor from any further performance of the contract but it does not absolve the client from paying the costs properly incurred to that date.”

Gary Minkin instructed Cooper in June 2009 to act in his divorce from his wife Sharon.

The solicitor’s initial estimate was exceeded before the case came to court when it emerged that Mrs Minkin had let the matrimonial home to paying tenants.

The possession proceedings required resulted in an interim bill for Mr Minkin of £5,472.50, which he queried but nonetheless asked Mr Cooper to proceed with litigation.

On several occasions the solicitor confirmed the firm would not act while there were outstanding arrears.

While acknowledging his client’s precarious financial position, he said at one point: “You may be able to recover your costs at the end of the matter from Sharon/the tenants but, on an ongoing basis, and I am aware of your financial position, we cannot work for free.”

Later he reiterated: “I appreciate finance is currently a strain for you but our firm’s policy is to have money on account before launching into litigation.”

In subsequent emails, he said: “Once again I sympathise with your position but I will not issue any proceedings until we are in funds,” and that: “We cannot continue to act in circumstances where there is a substantial amount outstanding.”

Mr Minkin eventually responded: “I would have liked to continue to work with you but I feel we have got nowhere since the hearing.”

A week before the next hearing was due, Mr Cooper wrote to the court saying his firm was “no longer instructed by Mr Minkin so will not be able to attend court on his behalf”.

Ward LJ commented that it was “absurd that such a lot of money has now been spent litigating over such a small sum”.