With the backdrop of an ever increasing number of Solicitors Act assessments being brought, it is always important to consider the potential costs consequences of bringing such a challenge. It is clear, from cases such as Belsner, that Solicitors Act assessments are very expensive.
Costs of Solicitors Act assessment
The Solicitors Act provides that the costs of the assessment will depend on the level of reduction that is made to the Solicitors’ bill of costs. If the Bill is reduced by less than 20% then the Court will award the costs of the assessment to the Solicitor. If, however, the Bill is reduced by more than 20% then the Court will award the costs of the assessment to the client to be paid by the Solicitor. This is known more commonly as the ‘one-fifth rule’.
However, there is provision at s.70(9) and s.70(10) which provides that the ‘one-fifth rule’ should prevail unless the Court finds 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 assessment as it may think fit’. Therefore, this opens the door for offers to be made which can alter the application of the ‘one-fifth rule’.
Unfortunately, whilst offers can be made in Solicitors Act assessments, CPR Part 36 offers do not have effect in Solicitors Act Assessments. This was the finding of Costs Judge Leonard in Zuhri v Vardags Ltd [2023] EWHC 3050 (SCCO). CJ Leonard found that CPR Part 36 had not been imported into the Solicitors Act and therefore the usual Part 36 benefits would not follow if a Solicitor was to achieve a better outcome at an assessment than the Part 36 offer made. In this case the Solicitors Bills were assessed at 98.6% of the costs billed and the Solicitor had beaten their Part 36 offer and were seeking to receive the usual Part 36 bonuses as a result.
Special Circumstances in Solicitor Act Assessments
CJ Leonard found that the term ‘special circumstances’ contained within the Solicitors Act could include the conduct of the Client (in Zuhri the Client had delayed and failed to respond to a number of queries raised by the Court) or to offers which had been made by either party to proceedings. CJ Leonard found that the Solicitors beating their offer in Zuhri would have met the threshold of ‘special circumstances’ and the solicitor would be awarded their costs of the assessment had the one-fifth rule not already be in effect.
Conclusion
In conclusion, offers should be made in Solicitors Act assessments and they can be used to justify ‘special circumstances’ that override the ‘one-fifth rule’. But, unfortunately, Part 36 consequences (10% bonus, indemnity costs higher interest rates etc) cannot be awarded in Solicitors Act assessments.
