From: Matt Muttley, managing partner
To: Partners and fee earners
RE: MOST IMPORTANT – FEES – ENGAGEMENT LETTERS TO CLIENTS
1. Perusing The Law Society Gazette this morning, I came across a report of the ‘utmost importance’ and I write to ask all partners and fee earners to ensure that clients are ‘fully appraised’ of our terms and conditions in the letter of engagement. I have asked Dr Erasmus Strangelove to address the issues raised by Mr Justice Cranston’s attack on our branch of the legal profession with the utmost haste. I am advised that a revised ‘Letter of Engagement’ will be ready to send out to clients today enabling us to unilaterally vary our original terms of engagement with immediate effect. Fortunately, we had the presence of mind to slip into Paragraph 4128(1)(c)(iii) of our Standard Terms of Engagement a right to unilaterally vary our contracts with clients at will and, even, on a whim.
2. Mr Justice Cranston’s judgment
I urge you to read the report in The Law Society Gazette immediately (Another advantage is that this may well count for CPD points). I quote from the most important and salient sections of this report:
Mr Justice Cranston dismissed an appeal brought by north London firm Cawdery Kaye Fireman & Taylor (CKFT), against a costs judge’s ruling that no fees were payable by their former client Gary Minkin after the firm refused to carry out more work until he had paid his bill.
The costs judge held that the firm’s refusal to continue to act without payment was a repudiatory breach of contract. He said the firm was not entitled to any costs, and had to refund all the fees that Minkin had paid so far, except for counsel’s fees.
Dismissing the firm’s appeal, Cranston said: ‘The outcome may seem harsh. But the fact is that it should have been made clearer in [the] retainer letter as to the nature of the engagement.’
He said the firm should have complied with the terms in its retainer letter and standard terms of business, and informed the client in writing that the costs estimate may be exceeded.
3. You will note that some comfort may be taken from the passage “and informed the client in writing that the costs estimate may be exceeded.”
As we always plan to exceed our estimates, even under the new Platinum Service scheme where we take 150% of our fee on account, we are unlikely to run into ‘problematic issues’; but it is our practice to be most observant on the matter of fees and cover the position and all eventualities, including force majeure and exclusion of act of god, death or other incapacity, when it comes to fulfilment by the client of the obligation to pay fees, disbursements and ‘uplifts’.
The idea that refusal to carry out further work until fees are paid could amount to a repudiatory breach of contract on our part – and worse, having to repay fees – is not just ‘harsh’, it is too awful to contemplate.
4. The firm expects you to do your duty, this day
Strength & Honour
PS: RollonFriday.com has a most excellent piece on claiming CPD points by going skiing. Taking the Piss or what?
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