LYGOE v ILSLEY

Last Updated: 7:19PM BST 07/05/2008
Queen’s Bench Division

HHJ Richard Seymour QC

April 21, 2008

Agreements – Client relationship management – Fees – Individual’s personal liability for solicitor’s fees relating to work for companies – Existence of agreement

FACTS

The claimant former solicitor (L) claimed against the defendant (D) for unpaid professional fees. L had done legal work for D in respect of private matters and matters concerning various companies with which D was involved and for which he gave instructions to L. L asserted that he and D had entered into a specific agreement at the start of their dealings, whereby D agreed to be personally liable for payment for work done by L either for D personally or for his commercial interests. D accepted that he had agreed to be personally liable for private matters but not for anything relating to any companies. The alleged costs of the work done amounted to £150,000 but L deducted £91,000 in respect of payments on account. D asserted that he had paid all monies owed to L. L submitted that D was liable for the sum of £59,000 in relation to both private and commercial matters. D submitted that he was liable only for the private work carried out by L and that if the court agreed L’s claim should be dismissed. D argued that the total amounts claimed by L in relation to the private work were less than the amount that he had already received.

ISSUE

Whether D was liable for the sum of £59,000 in relation to both private and commercial matters.

HELD (judgment for defendant)

D appeared to be transparently honest and had sought to assist the court as much as possible when giving evidence. In contrast, much of L’s evidence on the contentious matters had been troubling. His assertion that D had accepted liability not only for the costs of the private work but also for the costs of the corporate work was not obviously plausible. It was not the sort of agreement that a person in D’s position would be expected to have made. An individual who instructed solicitors to act on behalf of a company did not ordinarily accept personal liability to discharge the solicitors’ costs for acting on those instructions. Since the agreement for which L contended was such an unusual one, and given his legal knowledge as a solicitor, it was surprising that he had not ensured the agreement was either made in writing or at least clearly evidenced in writing. The only written evidence relied upon by L was at best equivocal and at worst adverse to his case. Further, L was unable to identify at what point in time the alleged agreement was made and accordingly his evidence was rejected. Therefore, in principle, D was liable to L only for the private work. On the evidence, D was personally liable to pay L his proper costs in relation to a small number of the matters in respect of which L had claimed. However, the sums already paid to L exceeded the amount that D owed and therefore L’s claim failed.

Adrian Davies (instructed by Walkers) for the claimant. Stuart Cakebread (instructed by Scanlan & Co) for the defendant.