Court Rules on Solicitor's Fees Dispute in Personal Injury Settlement

Introduction

The High Court has delivered a significant ruling in the case of Holcroft vs Thorneycroft Solicitors Limited, addressing the enforceability of a settlement agreement concerning solicitor's fees in a personal injury claim.

Background

The appellant, Ashley Holcroft, was represented by Thorneycroft Solicitors Limited in a personal injury claim following a road traffic accident on 11th May 2018. On 4th August 2020, Holcroft authorized Thorneycroft to accept a settlement offer of £24,200, which included deductions for the respondent's costs and disbursements.

Subsequently, Thorneycroft delivered a bill on 22nd February 2021, detailing the costs and disbursements. Holcroft challenged the bill, seeking an assessment under section 70(1) of the Solicitors Act 1974. However, District Judge Batchelor ruled that the agreement on 4th August 2020 precluded such an assessment, leading to the striking out of Holcroft's claim.

The Appeal

Holcroft appealed the decision, bringing the case before Mr. Justice Eyre. The central issue was whether the agreement reached on 4th August 2020 constituted a binding compromise of the solicitor's fees, thereby preventing Holcroft from invoking the section 70 procedure.

The appellant argued that the agreement was a non-contentious business agreement, allowing for an assessment of the fees. Conversely, the respondent maintained that the agreement was a binding settlement precluding any further challenge.

Parties' Dealings

The court examined the parties' dealings, noting that Holcroft had accepted the settlement offer promptly and without reservation. The retainer letter from Thorneycroft had outlined the terms of funding and the appellant's right to seek an assessment of the fees.

On 28th July 2020, the insurers for the other driver offered to settle Holcroft's claim for £24,200, inclusive of costs. Thorneycroft's letter on 4th August 2020 detailed the distribution of the settlement amount, including £9,000 for profit costs, £1,800 for VAT, and £2,910 for disbursements.

Legal Analysis

Mr. Justice Eyre considered the legal framework governing non-contentious business agreements and the section 70 procedure. The court highlighted the public interest in allowing clients to seek an assessment of solicitor's fees and scrutinized the agreement for any indication that Holcroft had foregone this right.

The court noted that the retainer letter and subsequent correspondence did not explicitly state that Holcroft was waiving his right to an assessment. However, the terms of the settlement agreement and Holcroft's acceptance indicated a clear understanding of the division of the settlement sum.

Decision

Mr. Justice Eyre concluded that the exchanges on 4th August 2020 amounted to a binding agreement on the division of the settlement sum, including the respondent's fees. This agreement precluded Holcroft from challenging the fees under the section 70 procedure.

The court emphasized the importance of clear communication and documentation in such agreements but found that the terms were sufficiently clear to constitute a binding settlement.

Conclusion

The High Court dismissed Holcroft's appeal, upholding the decision of District Judge Batchelor. The ruling underscores the significance of settlement agreements in personal injury claims and the conditions under which clients can challenge solicitor's fees.

This case serves as a critical reference for legal practitioners dealing with similar disputes, highlighting the need for precise and transparent agreements between solicitors and clients.