Clare Griffin v Kleyman & Co Solicitors Ltd

Costs Judge Leonard:

1. I have undertaken the assessment, under section 70 of the Solicitors Act 1974, of bills rendered by the Defendant to the Claimant between 30 March 2020 and 28 May 2021. The order for assessment (“the assessment order”) was made by consent on 13 May 2022, following an application for such an order by the Claimant, made under CPR Part 8 on 30 July 2021.

2. The Claimant’s Part 8 application was initially opposed by the Defendant. A one-day hearing was listed on 18 May 2022 with a view to determining whether an order should be made, but that hearing was rendered unnecessary by the assessment order.

3. The assessment order concluded the Part 8 application. As to the costs of the Part 8 application the assessment order incorporated, at paragraph 2, this provision: “On making the detailed assessment, the court must also assess the costs of these proceedings and certify what is due to or from either party in respect of the bill and the costs of these proceedings”.

4. That is standard wording, taken from Precedent L to Practice Direction

47. It embodies the standard practice of reserving the award and quantification of the Part 8 costs to the conclusion of the assessment process.

5. When the assessment process was complete, bills totalling £181,954.64 (including VAT and disbursements) had been assessed at £154,039.94. That is a reduction of £27,914.70 (15.34%). Having paid £174,309.82 against those bills, the Claimant is due a refund (“the billing refund”) of £20,269.88.

6. The purpose of this judgment is to address the parties’ submissions on the award of the costs of the assessment process and of the Part 8 application that led to it. The Costs of Assessment: Criteria

7. The starting point, on awarding the costs of a solicitor/client assessment, is dictated by subsections 70(9) and 70(10) of the 1974 Act, which provide: “(9) Unless— (a) the order for assessment was made on the application of the solicitor and the party chargeable does not attend the assessment, or (b) the order for assessment or an order under subsection (10) otherwise provides, the costs of an assessment shall be paid according to the event of the assessment, that is to say, if the amount of the bill is reduced by one fifth, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs. (10) The costs officer may certify to the court any special circumstances relating to a bill or to the assessment of a bill, and the court may make such order as respects the costs of the assessment as it may think fit.”

8. Given the outcome of the assessment, the effect of those statutory provisions is that, applying the “one-fifth rule” in section 70(9), the costs of this assessment should be awarded to the Defendant unless, in accordance with section 70(10), special circumstances would justify a different order. The Procedural History

9. I leave out of this brief account of a lengthy assessment process, matters such as adjournments and applications that have already been addressed by appropriate orders for costs, and so have no real bearing upon the issue before me now. I do however need (in order to put this decision in context) to say something about the matters in issue.

10. The Claimant’s Part 8 claim form made a number of allegations against the Defendant, including that she had not been given a proper estimate of the Defendant’s prospective fees, an estimate of £54,000 having been given on 22 May 2020.

11. The Claimant on the assessment itself gave a figure of £57,138 for the 22 May 2020 estimate (including accrued costs). Her case was that the Defendant’s bills should be limited to that figure, or to alternative figures of up to £88,648.80.

12. The Claimant’s case on estimates was heard as a preliminary issue and did not succeed. Whilst I found that there had been some failures on the part of the Defendant to advise adequately on estimates, I also found that the Claimant’s own refusal to conduct herself in a reasonable, realistic and cost-effective fashion made it impossible to identify any figure by which the Claimant’s costs and disbursements should be limited.

13. That left to be addressed the Claimant’s detailed Points of Dispute on the Defendant’s costs. That process did not produce a final figure for the assessed bill until 7 July 2025, and it was hampered by a number of errors and misunderstandings on the part of both parties.

14. The last hearing was on 21 August 2025, when I disposed of arguments on interest but was obliged to adjourn for written submissions on costs. Settlement Offers as Special Circumstances

15. It is clear, on established authority, that an offer of settlement may establish special circumstances for the purposes of section 70(10). Mr Dunne, for the Claimant, refers me to Angel Airlines SA v Dean & Dean [2008] EWHC 1513 (QB), in which Coulson J (as he then was) said, at paragraph 25 of his judgment: “For the avoidance of doubt, I am in no doubt that a clear without prejudice offer, made in proper time and in proper form, can be a special circumstance which might otherwise reverse the statutory presumption in s 70(9). One of the underlying principles behind the CPR is to encourage parties in any form of litigation to resolve their differences without incurring further costs, and it seems to me that it would be contrary to the CPR to find that a party involved in a detailed costs assessment under the Solicitors’ Act could not seek to protect its position on costs by making an offer.”

16. At paragraph 20 of his judgment Coulson J referred to paragraph 33 of the judgment of Smith J in Wills v Crown Estate Commissioners [2003] 4 Costs LR 581: “… This appeal emphasises the need for paying parties who wish to protect themselves against the costs consequences of CPR 47.19 to make realistic settlement offers at the beginning of the detailed assessment proceedings and not at the end. The court is bedevilled with late settlements. Procedures in CPR 47.19 are designed to promote reasonable offers and parties should bear this in mind in the future.”

17. Smith J was referring to the rules governing assessments between opposing parties, as opposed to assessments between solicitor and client, but Mr Dunne, for the Claimant, argues that the same principle applies to both kinds of assessment. I am sure that he is right: Coulson J, in Angel Airlines,saw fit to refer to the above passage, and at paragraph 21 of his judgment he described it as a point of general principle. Offers Made In This Case

18. Before reviewing the parties’ attempts at settlement I should mention that, for the purposes of this decision, it is accepted by both parties that CPR Part 36 has no application to an assessment under section 70 of the 1974 Act. Whilst here is no binding authority on the point, I gave my own reasons for reaching that conclusion in Zuhri v Vardags Ltd [2023] EWHC 3050 (SCCO), and neither party wished to reopen that discussion.

19. I should also mention that a key part of the rationale behind my decision in Zuhri v Vardags Ltd was that the costs provisions of CPR Part 36 (as secondary legislation) are inconsistent with the costs provisions of subsections (9) and (10) of section 70 (as primary legislation).

20. There is however no obstacle to an offer that does not have the consequences prescribed by Part 36 being accepted so as to create a binding contract of settlement.

21. There have been a number of offers of settlement in this case but only two of them are really significant for present purposes.

22. On 23 May 2022, ten days after the assessment order was made, the Claimant sent the following email to the Defendant, headed “Part 36 Offer To Settle”: We write with regards to the above matter and the assessment of your bills. The amount under assessment is £181,954.64. You are owed £10,452.82 in accordance with your witness evidence… Our client will accept £28,000.00 in full and final settlement of her Part 8 Claim. This offer includes interest to the date of acceptance or expiry of the period for acceptance of this offer. If this offer is accepted, the payment to our client will be £17,547.18 once the amount you are owed in accordance with your witness evidence is deducted. It is a Claimants Offer and it is intended to have the consequences of Part

36. If the offer is accepted within 21 days of service of this offer, the defendant will be liable for the claimant's costs in accordance with rule 36.13. If you chose not accept this offer, but our client obtains Judgment which is at least as advantageous as this Offer, our client will rely on consequences set out under CPR 36.17. If you regard this as a defective Part 36 Offer you should notify us by return.”

23. The Defendant responded on 6 June 2022: Firstly we are unsure why your offer is plus costs considering the sum your client is offering to accept is less than 20% reduction she would need to achieve to obtain a costs order. We assume you have advised your client that unless she achieves a reduction of at least 20%, she is going to be ordered to pay our costs as well as bear her own. Secondly your client is offering to accept a sum of £28,000 as a full and final settlement however this is almost 25% less than the necessary 20% reduction she would need to achieve to get costs. We draw the obvious inference to this offer in that your client is accepting that she is highly unlikely to achieve a reduction of at least 20% as otherwise her initial offer would have been over that threshold to put us at risk on costs. This offer somewhat undermines your client's position… We would be willing to settle this matter on a drop hands basis with no order as to costs. Therefore the sum of £10,452.82 which is currently owing shall be written off and no further costs shall be sought. When considering our counter-offer your client should be aware that our costs for this matter are already in the region of £10,000…”

24. In the course of the detailed assessment proceedings that followed, it was established that the Defendant had incorrectly included in its bills disbursements to the value of £4,334.10. The Defendant’s bills should have totalled £177,620.54 (not £181,954.64), against which the Claimant had paid £174,309.82. The balance of £10,452.82 said by the Defendant to be due and outstanding was, accordingly substantially overstated. Even without any other deduction to its bills, the Defendant could never have claimed more than £3,310.72 as an outstanding balance.

25. Had that been known on 23 May 2022, the billing refund proposed by the Claimant would presumably have been reduced accordingly. As it is (and as a result of the Defendant’s own billing errors) the Claimant is able to point to the fact that, following the reduction of the Defendant’s bills on assessment, the Claimant is now due a billing refund of £20,269.88, rather than the £17,547.18 proposed by the Claimant on 23 May 2022. In that respect at least, the Claimant’s offer of 23 May 2022 was more advantageous to the Defendant than the actual outcome of the assessment.

26. The Claimant argues, in consequence, that she should be awarded her costs of the assessment.

27. The Defendant’s answer to that, as Mr Silva for the Defendant explains, is that the Claimant’s offer was not simply to accept the sum of £17,547.18 to settle the proceedings. It was, in effect, an offer to reduce the Defendant’s bills by £28,000 (a reduction which the Claimant has not achieved on assessment). Further, it was a condition of the offer that the Defendant pay the Claimant’s costs, which were not identified in the offer but which (judging from a costs schedule subsequently produced by the Claimant for a hearing in August 2023) by 23 May 2022 exceeded £10,400 on document time alone.

28. In other words, says Mr Silva, the Claimant’s offer of 23 May 2022 was not to settle the claim in return for a payment from the Defendant of £17,547.18, but (although the offer did not make that entirely clear) to settle the claim in return for the payment by the Defendant of a sum of (at least) approximately £27,950, which is a great deal more than the billing refund now due to the Claimant. The Part 8 Costs

29. The Claimant’s offer of 23 May 2022 did not distinguish between the (concluded) Part 8 application and the (current) assessment proceedings, and so treated the Part 8 costs as, in effect, a component of the costs of a single process of Part 8 application and assessment. The Defendant’s response of 6 June 2022 appears to have adopted the same approach.

30. In fact there is a distinction between the Part 8 costs and the costs of assessment. Section 70(9) refers only to the costs of the assessment. The Part 8 application is a separate, self-contained process, and its costs are governed in the usual way by CPR 44.2.

31. That said, the Claimant’s Part 8 claim was part and parcel of her attempt to reduce the Defendant’s billed costs by a substantial sum. In particular it was always the Claimant’s case, in effect, that the Defendant’s costs should be limited by reference to the May 2020 estimate. So much is evident from her Part 8 claim form. There was logic in a mutual approach to settlement that assumed that the Part 8 costs would fall into line with the costs of assessment. Whether the 23 May 2022 Offer Establishes Special Circumstances

32. I accept that, on the facts of a given case, a Part 36 offer (albeit not effective as such) might offer a ground for a finding of special circumstances. As Coulson J explained in Angel Airlines, a clear without prejudice offer, made in proper time and in proper form, can be a special circumstance which could reverse the statutory presumption in section 70(9). In my view such an offer, if more advantageous to the offeree than the eventual outcome of the assessment, would offer strong grounds for doing so.

33. The Claimant’s offer of 23 May 2022 was not, however, such an offer. I have reached that conclusion for these reasons.

34. One cannot look at the billing refund in isolation. One must also bear in mind the nature and content of the offer of 23 May 2022; the amount by which the Defendant’s bills have, on assessment, been reduced; the fact that the costs of the assessment proceedings are subject to the one-fifth rule; and that the Claimant (offers aside, and given the outcome of the assessment) never had a case for requiring the Defendant to forfeit its costs of the assessment, or to pay her costs of the assessment.

35. As to the question of whether the 23 May 2022 offer was (as Coulson J put it) in the proper form, to my mind it was not.

36. The offer provided for the Defendant’s bills to be reduced by £28,000 (less than one fifth). It provided however that on acceptance the Defendant would lose the attendant section 70(9) right to recover its costs of assessment (within which both parties included the Part 8 costs) and substituted, by reference to CPR 36.13(1), an entitlement on the part of the Claimant to recover her costs.

37. In short, the Claimant’s offer of 23 May 2022 represented a misconceived attempt to reverse the effect of section 70(9) of the 1974 act through the operation of CPR Part 36, which (for the reasons I gave in Zuhri v Vardags Ltd) is not possible.

38. It was, in consequence, not a realistic offer. I find it unsurprising that the Defendant was unwilling to accept it. The Defendant’s “drop hands” offer of 6 June 2022 (even incorporating, as both offers did, the Defendant’s overbilling errors) seems to me to have been a more sensible proposition.

39. There is then the question of whether it is right to say that acceptance of the Claimant’s 23 May 2022 offer would have left the Defendant in a better position than it is in now, at the conclusion of the assessment. In my view it would not be right to say that, for these reasons.

40. The great majority of solicitors’ bills are reduced at least to some extent on a section 70 assessment, if only because of the inherent improbability of managing any case with perfect efficiency. That is particularly true (as here) of lengthy retainers based on hard-fought, high-pressure contentious matters, where there is more scope for occasional mismanagement or inadequate time recording. Solicitors facing an assessment on the application of a client, whose costs are reduced by less than one fifth, may nonetheless regard the assessment as a success, at least as costs are concerned, if under section 70(9) they will receive the costs of the assessment process.

41. The Claimant’s offer of 23 May 2022 to reduce the Claimant’s costs by £28,000 looks now like a remarkably shrewd guess at the possible outcome of the solicitor/client assessment that had just started. The Defendant has only very narrowly beaten it with a reduction (including the elimination of the wrongfully billed disbursements in the Defendant’s bills) of £27,914.70.

42. It was also, however, an express term of the offer that, if it were accepted, the Defendant would pay the Claimant’s costs to the date of acceptance. On the evidence, as Mr Silva says, those costs would appear to have been in the region of at least £10,400.

43. Had the Defendant accepted the Claimant’s offer of 23 May 2022 then the Defendant would indeed have made a smaller billing refund to the Claimant, by £2,722.70, than it is required to do now. The Defendant would also, however, have had to pay the Claimant’s costs, resulting in a total payment to the Claimant well in excess of the billing refund now due.

44. The Defendant would also have forfeited its right, in accordance with the one-fifth rule, to claim its costs of the assessment process on the reduction of its bills by less than one-fifth.

45. The outcome of the assessment process has been an overall reduction, following assessment, to the Defendant’s bills at very slightly less than that proposed by the Claimant on 23 May 2022 and the preservation of the Defendant’s prima facie right to claim its costs under the one-fifth rule.

46. I appreciate that even after the reduction of the Defendant’s costs by less than one fifth, the recovery of the Defendant’s costs was never a certainty.

47. It seems to me nonetheless that the preservation of those rights, even subject to a necessary element of uncertainty, in itself outweighs the reduction of the billing refund by £2,722.70, or is at least sufficient to prevent the Claimant from relying on the 23 May 2022 offer as establishing special circumstances.

48. In summary, I do not accept that the Defendant should be deprived of its right under the one-fifth rule to recover its costs by virtue of an offer that sought, unsuccessfully, to defeat that right through CPR Part 36 and which required that the Defendant pay the Claimant’s costs to date. The offer of 23 May 2022 is not sufficient to establish special circumstances displacing the one-fifth rule.

49. I would add that if I had come to a different conclusion on that point, it is unlikely that I could have been persuaded to award to the Claimant any part of the costs of the estimates issue.

50. The reasons for that can be derived from my judgment of 14 May 2024 of the estimates issue, but very briefly the Claimant’s case was not only overstated, but attached blame to the Defendant for problems that were primarily of the Claimant’s own making. This extended to unfounded and unfair allegations of impropriety against Ms Kleyman of the Defendant solicitors. Even after the estimates issue had been determined, the unfounded attacks on Ms Kleyman remained a feature of these proceedings. I regard that as regrettable. Conduct

51. Both parties have bolstered their arguments on the costs of the assessment with robust submissions as to the other’s conduct. As I have indicated, each can point to errors and omissions on the other’s part that unnecessarily prolonged the resolution of the assessment process. With one exception, discussed below, those errors and omissions may have some impact when it comes to the summary assessment of costs awarded, but do not really bear on the award of costs in principle. Conclusions on the Costs of Assessment

52. Given that the Claimant cannot rely upon the 23 May 2022 offer, it follows that, by virtue of the one-fifth rule, the Defendant should receive the costs of the assessment. That however is subject to one qualification.

53. The Defendant overbilled the Claimant by £4,334.10. That may not appear to be a large sum in the context of total billing, but the Claimant has a right to regard it as a significant sum: it is her money. The overbilling should not have happened. I have found it to have arisen from negligence on the Defendant’s part.

54. The Claimant, with some justification, complains of a general failure on the Defendant’s part to manage its financial records properly: hence the failure of the Defendant to produce a cash account in accordance with the assessment order in May 2022, and even when ordered again on 11 December 2024. Even with some assistance from the Claimant’s costs draftsman as to the form which a cash account can take, a cash account was not finalised by the Defendant until June 2025.

55. That is not acceptable. It does not reflect well upon the Defendant’s record keeping. The poor management of the Defendant’s accounting and billing records has in my view impeded the clarification and resolution of the issues on this assessment.

56. Nor should it ever have been necessary for the Claimant to engage in a detailed assessment process to find out that she had been overbilled.

57. For those reasons I am awarding to the Defendant 80%, rather than 100% of its costs of the assessment process. Conclusions of the Part 8 Costs

58. As I have observed, the Claimant’s Part 8 claim was part and parcel of her unsuccessful attempt to reduce the Defendant’s billed costs by a substantial sum. There is, accordingly, a cogent case for those costs (as the parties, in the correspondence to which I have referred, anticipated) being awarded in line with the costs of assessment.

59. Mr Dunne, for the Claimant, argues however that the Claimant should have her costs of the Part 8 claim because it was initially opposed by the Defendant, which only conceded that there should be an order for assessment shortly before a hearing to determine the point. In effect (although he does not use the word) he seems to me to be saying that the assessment order represents a capitulation on the part of the Defendant.

60. I have no reason to characterise the assessment order as a capitulation rather than, as it appears to be, a compromise. The assessment order carried the issues raised in the claim form through to the assessment process. Otherwise it might, for example, have been necessary to deal with the substance of the estimates point within the Part 8 proceedings, with the prospect of an element of duplication on any assessment. It seems to me to have been quite sensible, from both parties’ point of view, to have provided for every dispute to be resolved within a solicitor/client assessment.

61. The Defendant could however have recognised that at the outset, rather than waiting until shortly before a hearing to concede the point. For that reason my conclusion is that the Claimant should pay to the Defendant half its costs of the Part 8 proceedings.