PI Brief Update

'Occupational hazards' and direct access cases: Glaser v Atay [2023] EWHC 2539 (KB) - Amy Lanham Coles, Temple Garden Chambers

31/10/23. This case focused on the application of the Consumer Rights Act (“CRA”) 2015 to barristers’ fees in a case where a lay client had instructed two barristers on a direct access basis; had agreed to pay a fixed fee in ahead of a five day hearing; and then once the hearing was adjourned informed the barristers that she no longer wished to instruct them and refused to pay the fees. The High Court determined that the CRA 2015 precluded the barristers’ from claiming for their fees.

Facts

The lay client (the Defendant) instructed barristers (the Claimants) to represent her in family proceedings. The trial was listed to be heard over a ten day period starting on 21 September 2020. By letters dated 29 June 2020, the Claimants set out their terms and conditions for payment. This included what was described as the “payment term” as follows: “For the avoidance of doubt, the fee covers the above mentioned work and therefore if the hearing concludes early or is adjourned to another date or does not go ahead for any reason beyond our control, then the full fee is still payable and another fee will be payable for any adjourned hearing.”

The total amount due was in excess of £150,000 to be paid in instalments on 6 July 2020, 10 July 2020 and 31 August 2020, with a final instalment of less than £10,000 to be made 28 days after receiving the final order. On 26 August 2020, the other side in the family matter successfully applied to adjourn the trial. On 31 August 2020, when the bulk of the legal fees fell due, the Defendant emailed the Claimants’ clerk indicating she no longer wished to instruct them. She contended that they were entitled to nothing under the contract. The Claimants contended that they were entitled to payment of their fees in full.

Judgment 

Berkley HHJ recognised that the payment of fees in advance was more complex for barristers instructed on a direct access basis as they could not hold client monies. He noted that the fee agreement was based on a Bar Standards Board (“BSB”) template but recognised there were a few key distinctions: the template was designed for hearings that lasted only one day; refresher fees were not “rolled up” within the fixed fee and there was no express provision for payment of fees if the hearing did not go ahead as planned (paragraph 14). He therefore noted “my findings are therefore not to be taken either as an endorsement or condemnation of the BSB terms” (paragraph 15). He also considered paragraph gC107 of the BSB’s Guidance in relation to upfront fixed fees, noting that the prohibition on holding client monies did not preclude a barrister from agreeing terms that facilitated reimbursement of part of a fixed fee with reference to time actually spent (paragraph 54).

Berkley HHJ recognised that the CRA 2015 struck a balance between freedom of contract (via “safe harbour provisions”) and protections for consumers – including by limiting freedom of contract via Part 1 of Schedule 2 of the CRA 2015, known as the “Grey List”. He determined that the payment term in this case did fall within paragraph 5 of the Grey List; being “a term which has the … effect of requiring that, where the consumer decides not to conclude or perform the contract, the consumer must pay the trader a disproportionately high sum…for services which have not been supplied” (paragraph 44). This did not mean that the term was automatically unfair but that its fairness fell to be considered (paragraph 45).

Berkley HHJ determined that the payment term was unfair (paragraphs 59 & 91). He agreed with the judge below that it was an “all or nothing” term weighing 100% in favour of the barrister – “even if there had been no work done whatsoever, the fees would have remained payable” (paragraphs 59 & 61). He took into account that the lay client had not been separately advised; was in a position of relative vulnerability; and would not likely have been aware of the sector specific risk of adjournment (paragraph 63). He noted the Claimants would have (or ought to have) known about the possibility of an agreement that facilitated reimbursement if the trial did not proceed as planned (paragraph 63). The unfair term was therefore held not binding on the Defendant and the Claimants could not rely on it to recover their fees (paragraph 67).

The judge also considered whether the Claimants could recover any fees on a quantum meruit basis. He concluded this was not possible as it would undermine the statutory regime (paragraphs 74, 76, 77 & 91). In any event he noted the Defendant was not in breach of contract; she was under no obligation to continue to instruct the barristers; and she had gained no benefit simply because the Claimants had blocked out their diaries, thereby casting doubt (albeit obiter) on the merits of a quantum meruit claim notwithstanding the effect of the CRA 2015 (paragraphs 80, 81, 82, 86 & 88).

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