Reynolds v Stone Rowe Brewer [2008] EWHC 497 (QB)

Posted on Tuesday, March 18th, 2008

This was a matter where the Claimant instructed her solicitors (Stone Rowe Brewer) with regards to a building dispute. Early on in the claim, the solicitors informed the Claimant that costs to trial were likely to be in the region of £10,000 – £18,000 plus VAT. The solicitors invoiced the Claimant as time went on and she made payments on account. Costs estimates were also sent to the Claimant but these started to escalate dramatically until one estimate received stated that the likely overall cost of the case to Trial was up to £60,000 plus VAT. Further invoices were received by the Claimant and the running total of the costs was over £59,000. The estimate then decreased to £55,000 plus VAT to Trial as the matter was likely to be concluded by way of a one day hearing. At this point the solicitors refused to act any further as they stated that there was an outstanding liability of over £25,000. The Claimant instructed new solicitors and she was successful and awarded damages of £55,380.

At assessment, the costs judge considered that the solicitors should be bound by the original costs estimate of £18,000 and added a 15% margin, bringing the total to £20,700. The costs judge regarded the estimate as relating to profit costs only and so the total costs allowed, including disbursements and VAT, were £36,328.40. The solicitors appealed.

Mr. Justice Tugendhat found that the explanations given for the discrepancies between the estimates and the bills did not justify the increase in costs and that the resulting figure exceeded what was reasonable in all circumstances that the client was expected to pay. The solicitors were aware that the original costs estimate of £18,000 could just be afforded by the Claimant. Therefore, the figure allowed by the costs judge was reasonable in this case and the appeal was dismissed.

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