Dangers of Costs Recovery for Solicitor Attorneys

Solicitor attorneys acting as litigants in person, risk being unable to recover their legal costs a recent Court of Protection decision has confirmed.

In JMH v CFH [2020] EWCOP 63, the Court determined a solicitor was unable to rely on the historic Chorley principle, which entitles lawyers acting on their own behalf to claim the same costs as if they employed a solicitor.The case is a stark warning of the potential costs risks for solicitors acting as litigants in person, a not uncommon event in Court of Protection proceedings.The substantive case concerned the applicant’s capacity to revoke an Enduring Power of Attorney made in favour of her daughter, the first respondent, and to execute a Lasting Power of Attorney appointing the second respondent, a solicitor, as attorney in her place. The substantive dispute was resolved in the course of the litigation with the appointment of two independent professional deputies. The case before the Court was whether the solicitor second respondent, acting as a litigant in person, was entitled to recover her costs of the proceedings.In the judgement, Her Honour Judge Evans-Gordon focussed on a period of time between 12 April 2019 and 8 August 2019. The judge distinguished this from an earlier period in the litigation when the second respondent and her firm KSN Solicitors were effectively acting as agent for the applicant. The judge found that neither KSN nor the second respondent were parties in their own right at this time but “simply the persons through whom the applicant acted”. KSN’s legal costs during this period were recoverable by the applicant in the usual way.However, after 12 April 2019 the substantive proceedings had been resolved and the only dispute was in respect of the costs. The Court found the second respondent was then acting as a party in her own right. During this period, the second respondent positively confirmed in her witness statement that she was no longer instructing KSN but acting in person. The question before the Court was whether she was entitled to recover the costs she incurred under the Chorley principle.In essence, the Chorley principle, which comes from the case of London Scottish Benefit Society v Chorley [1884] 13 QBD 872, is that solicitors, when acting in person, ought to be able to recover their profit costs on the basis that they would otherwise employ another solicitor to act for them.The judge held the Chorley principle could not apply in this case because the second respondent was neither a partner of KSN nor had she instructed it to act for her. This was despite the fact she was, throughout the entire proceedings, a solicitor employed by KSN.The judge found she would have been willing to imply a retainer between the second respondent and KSN but here the evidence was clear that KSN were not instructed by her.The judge determined: “If this was a case when KSN simply acted for SAP [the second respondent] and there was no evidence of any agreement that she would not be liable for their fees, I would have no difficulty in implying a retainer for them by her even if she herself carried out most of the work… However, in this case the evidence shows that SAP never instructed KSN to act for her and has never been personally liable for any of their fees”. As a result, the judge found the second respondent was only entitled to recover the usual litigant in person costs relating to disbursements, court fees and time costs.  The judgement is a sobering reminder that solicitor attorneys who are parties in Court of Protection proceedings should ensure they are instructing solicitors and not rely on the Chorley principle to recover their profit costs.Interestingly, the judge also found the fact that the Court of Protection is not a Senior Court for the purposes of the Litigants in Person (Costs and Expenses) Act 1975 did not necessarily result in a litigant in person being unable to recover their time costs. The judge found there was no evidence that there was a deliberate decision to disapply the 1975 Act when the Court of Protection was created.

Please get in touch with our Private Litigation Team if you have any questions or would like advice on anything covered in this article.