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In the recent case of Glaser & Anor v Atay [2024] EWCA Civ 1111, the Court of Appeal upheld a significant ruling concerning the recovery of legal fees

Background

The dispute arose when Mrs. Atay, who was involved in financial remedy proceedings against her ex-husband, hired Michael Glaser KC and Victoria Miller, a junior counsel, for a trial listed in September 2020. The trial was postponed following a successful adjournment application by her ex-husband. The barristers sought to enforce a payment term agreed in their letter of engagement, which required the bulk of the fees—£90,000 for Glaser and £45,000 for Miller—by August 2020.

Mrs. Atay had already paid part of these fees but refused to pay the outstanding amounts following the adjournment, arguing that the terms were unfair under the Consumer Rights Act 2015. At first instance the court ruled that the barristers were entitled to 70% of the outstanding instalments on a quantum meruit basis and both parties appealed that decision.

Decision

Dismissing the appeal, the court held that the requirement to pay virtually the full amount before the trial started, without the opportunity to negotiate terms or consider potential savings if the case was adjourned, placed an unfair burden on the client. The barristers’ contract did not account for the possibility of changes, such as the adjournment, that would have affected the fees.  Instead, the term for payment placed all the risk on Mrs. Atay, who was not in a position to foresee the likelihood of an adjournment or how it might affect the legal costs. The barristers, being more familiar with these risks, should have crafted the contract in a way that balanced the risks more fairly, so that it aligned with both consumer protection laws and the realities of legal proceedings, and also protected their own interests.

The judgment underscores the need to ensure that contracts are updated to ensure they are both fair and transparent, particularly in public access cases where consumers may not have the benefit of solicitors to guide them through complex legal agreements.

Details

In the recent case of Glaser & Anor v Atay [2024] EWCA Civ 1111, the Court of Appeal upheld a significant ruling concerning the recovery of legal fees

Background

The dispute arose when Mrs. Atay, who was involved in financial remedy proceedings against her ex-husband, hired Michael Glaser KC and Victoria Miller, a junior counsel, for a trial listed in September 2020. The trial was postponed following a successful adjournment application by her ex-husband. The barristers sought to enforce a payment term agreed in their letter of engagement, which required the bulk of the fees—£90,000 for Glaser and £45,000 for Miller—by August 2020.

Mrs. Atay had already paid part of these fees but refused to pay the outstanding amounts following the adjournment, arguing that the terms were unfair under the Consumer Rights Act 2015. At first instance the court ruled that the barristers were entitled to 70% of the outstanding instalments on a quantum meruit basis and both parties appealed that decision.

Decision

Dismissing the appeal, the court held that the requirement to pay virtually the full amount before the trial started, without the opportunity to negotiate terms or consider potential savings if the case was adjourned, placed an unfair burden on the client. The barristers’ contract did not account for the possibility of changes, such as the adjournment, that would have affected the fees.  Instead, the term for payment placed all the risk on Mrs. Atay, who was not in a position to foresee the likelihood of an adjournment or how it might affect the legal costs. The barristers, being more familiar with these risks, should have crafted the contract in a way that balanced the risks more fairly, so that it aligned with both consumer protection laws and the realities of legal proceedings, and also protected their own interests.

The judgment underscores the need to ensure that contracts are updated to ensure they are both fair and transparent, particularly in public access cases where consumers may not have the benefit of solicitors to guide them through complex legal agreements.