Challenges in Establishing Implied Retainers: Insights from Cooke & Ors v Woodchurch House Ltd
Cooke & Ors v Woodchurch House Ltd (Rev1) [2023] EWHC 3318 (SCCO) highlights difficulties that can arise when the Claimant is seeking to argue there is an “implied retainer” when seeking to recover costs for part of a claim not covered by a funding arrangement.
The claim for costs arose from a civil claim following the tragic death of Mr Paul Chin whilst in the Defendant's care. The First and Second Claimants were the parents of the Deceased, and the Third Claimant was a sister of the Deceased.
One of the preliminary issues for consideration at the Detailed Assessment was whether a valid retainer, implied or otherwise, existed prior to the obtaining of the Legal Help certificate on 6 May 2016.
The parties agreed on the law in respect of the formation of an implied retainer and that the two stage test in Robinson v EMW Law LLP [2018] EWHC 1575 (Ch) was to be considered by the Court. Firstly, whether the solicitors whose costs are sought were acting for the receiving party as their client. If so, that creates a rebuttable presumption that liability for the solicitor’s costs exists and one goes on to address the second question: does an agreement exist between solicitor and client that there would be no liability for costs in any circumstances.
The Defendant alleged, that the Claimants presented an inconsistent account as to how the Claimants funded the claim prior to Legal Help as the Bill of Costs was silent as to funding for that period and the Claimant’s Replies to Points of Dispute later asserted that a private retainer existed between the Third Claimant and Leigh Day but remained silent as to the other Claimants. Further, there was no evidence of a retainer existing prior to the letter of 5 May 2016 and, in any event, the letter only referred to Leigh Day acting for the Third Claimant under the Legal Help scheme expressly restricted to the inquest only.
The Defendant argued that no implied retainer could be present before 5 May 2016 because there was no evidence that the Claimants were the clients of Leigh Day. All Leigh Day was concerned with at that time were preliminary enquiries scoping out the possibility of a claim, which, if answered positively, Leigh Day would then sign up the Claimants as clients with costs to be paid under the provisions of the Legal Help scheme. The Defendant asserted that this was not the same as signing up the Claimants as clients from the very outset and the Claimants therefore fell at the first Robinson hurdle.
Further, there was an implied agreement that the Claimants would not be required to pay Leigh Day's fees. There was no advice from Leigh Day to the Claimants that they would need to make payment and no evidence as to an attempt to create a retainer until Leigh Day could apply for Legal Help.
Leigh Day argued that they acted for all 3 Claimants under the Legal Help scheme from 7 January 2016. The Claimants were unable to produce the Legal Help certificate but maintained it was clear from the documentary evidence provided that the certificate was obtained for the entire family.
The documentary evidenced relied upon by the Claimant was a Witness Statement from Ms Nancy Collins, a Partner in the firm of Leigh Day, a telephone attendance note dated 3 May 2016, an entry in the time recording ledger dated 19 December 2016 supported by an attendance note and a client care letter of 5 May 2016.
It was the Claimant’s position that an implied retained existed prior to Legal Help being instigated. The Claimant relied upon Robinson as support for the proposition that, absent direct evidence to show the solicitors agreed to act for the Claimants for free, an implied retainer existed prior to Legal Help being instigated. As no such evidence was available the implied retainer was made out. Further, the client care letter of 5 May 2016 was in effect a private paying retainer which covered any 'gaps' which may have existed.
The Court rejected the Claimant’s arguments as evidentially insufficient. Firstly, it was held that Ms Collins could not give direct evidence as to the state of contractual relations between Leigh Day and the Claimants given that she was not employed by Leigh Day (at the time).
Secondly, the earliest document from the file upon which the Claimants relied was the note of 3 May 2016. The Court considered that the first hurdle of the Robinson test, that the Claimants were clients from the outset, was not satisfied by that attendance note. Thirdly, the overwhelming evidence on the file of papers was that Leigh Day were not prepared to accept the Claimants as clients without having first secured Legal Help funding.
It was also considered that the Claimants failed the second Robinson test, as the implication from the email of the Third Claimant dated 12 April 2016 was that the Claimants had no liability to pay for the services of Leigh Day.
Finally, the Court determined that the client care letter of 5 May 2016 did not create a retrospective private retainer. There was no express language in the letter to create retrospective liabilities. The natural and ordinary meaning of the language "from first instruction" must engage with the first instructions from a client. The concept of being a client and providing instructions cannot be divorced. As the Claimants were not clients until the Legal Aid retainer was in place, it must follow that they did not provide instructions upon which Leigh Day were duty bound to act sufficient to create a liability for costs extending back to December 2015. The Court therefore determined that no implied retainer existed before the Legal Help retainer was created.
The decision in Cooke is a reminder of the difficulty in seeking to argue that an implied retainer exists in circumstances where the evidence suggests that there was no intention to create any form of retainer. When considering the position in relation to funding at the outset of the case the solicitor should have the two-stage test outlined in Robinson in mind. It is required to make it expressly clear the point at which the potential client becomes a client. Following this there must not be an agreement in place between solicitor and client that there would be no liability for costs in any circumstances. Given the potential risks in establishing the existence of an implied retainer, practitioners would be well advised the consider a written retainer at the outset of any matter. Alternatively, if an implied retainer is to be relied on, it is crucial that the scope of that retainer is clear and well documented.
