04.06.08: Carver v BAA Plc

Costs estimates - solicitors' revised estimates of costs

QBD (Mr Justice Tugendhat)

 

The appellant firm of solicitors (S) appealed against a decision of a costs judge that it was bound by an estimate given to the respondent (R).

 

A dispute had arisen between R and a building contractor. R consulted S, who informed her that the estimated cost of taking the matter forward and through to trial would be in the region of £10,000 to £18,000 plus VAT. The building contractor subsequently issued proceedings against R, and she instructed S to act for her in conducting her counterclaim.

 

Throughout the course of the litigation S sent R a number of invoices, and then sent a letter stating that S's estimate as to the likely overall cost of the case had to be revised to around £30,000 plus VAT. R had already paid S around £15,000 in line with the original estimate, but further bills were sent to her. R did not pay them, and S informed her that, as the sum of £25,000 remained outstanding, it would not act further.

 

R instructed new solicitors, was ultimately successful on all elements of her counterclaim and was awarded damages. The question of costs payable by R to S was referred to the costs judge. He went through all the points of dispute and concluded that S should be bound by its estimate of £18,000, to which the 15% 'margin' available under established case law would be added, thereby limiting R's liability for costs to £20,700, Wong v Vizards [1997] 2 Costs LR 46 QBD cited.

 

S contended that the judge had erred in failing to take into account that the whole point of the revised estimate had been to advise R in advance of the costs being incurred that the original limit of £18,000 was going to be exceeded, and that she had treated the original estimate wrongly as a fixed quotation.

 

Held: There had been no error of law on the part of the judge of which S could complain. He had been entitled to have held that S should be bound by the estimates. The revised estimate had been an attempt to correct an earlier under-estimate and was not attributable to any change in the facts. There had been no significantly unusual developments before the revised estimate such as to explain the difference between the £18,000 estimate and the £30,000 revised estimate.

 

Appeal dismissed.

 

Lord Justice Rix and Lord Justice Keene agreed.