The Supreme Court Costs Office

No. 24 of 2005

Kitchen v Burwell Reed & Kinghorn Limited

3 August 2005

Mr Justice Gray Sitting with Assessors

On this appeal from a Costs Judge the Judge had to decide two issues:

1. Whether a letter sent by Thompsons to the claimant on 8 July 2002 was effective to vary the initial retainer contained in the solicitors' letter of the 17 May 2001 so as to incorporate the collective conditional fee agreement entered into between the AEEU and Thompsons on 1 June 2001; and
2. Whether the effect of clause 5.8 of the CCFA, whereby Thompsons agreed not to seek to recover their charges direct from the claimant should be construed as an agreement on the part of Thompsons that the claimant should have no liability to pay their costs with the result that the defendant is not entitled to recover any costs from the claimant.

The Judge, in agreement with the Costs Judge, held the first issue was to be decided on the proper interpretation of the letter of 8 July 2002 and again in agreement with the Costs Judge, the Judge held that the letter did effect a variation of the claimant's retainer.

The second issue which was said to be of great importance in extending far beyond the ambit of this particular case turned on the effect of paragraph 5.8 of the CCFA which reads:-

"5.8. The solicitors shall not seek to recover direct from the member their charges in respect of any period during which the member was covered by the Union's legal assistance unless that legal assistance has been annulled".

The Judge following the earlier so called Union cases in particular Adams v London Improved Motor Coach Builders [1921] 1KB 495 agreed that this so called "attenuated approach" to the indemnity principle was fully accepted Union matters and accordingly again the Judge held that the Costs Judge came to the right conclusion in holding this paragraph did not amount to a breach of the indemnity principle.

Accordingly the appeal was dismissed on both heads.