The Senior Courts Costs Office’s decision in Griffin v Kleyman & Co Solicitors Ltd [2026] EWHC 257 (SCCO) clarifies that a settlement offer which attempts to reverse the statutory one-fifth rule through CPR Part 36 mechanics will not constitute a “special circumstance” under section 70(10) of the Solicitors Act 1974.
Background
The case concerned an assessment, under section 70 of the Solicitors Act 1974, of bills totalling £181,954.64 (including VAT and disbursements) rendered by the defendant firm, Kleyman & Co Solicitors Ltd, to its former client, Clare Griffin [§1]. The bills related to work undertaken between 30 March 2020 and 28 May 2021 [§1]. The assessment was ordered by consent on 13 May 2022 following a Part 8 application made by Ms Griffin on 30 July 2021 [§1]. That Part 8 application had initially been opposed, with a one-day hearing listed on 18 May 2022 to determine whether an order should be made, but that hearing was rendered unnecessary by the consent order agreed five days earlier [§2].
The consent order incorporated, at paragraph 2, the standard provision taken from Precedent L to Practice Direction 47 requiring the court to assess both the bills and the costs of the Part 8 proceedings, reserving the award and quantification of costs to the conclusion of the assessment process [§3–4]. The detailed assessment was a lengthy process. The claimant’s case on estimates was heard as a preliminary issue but did not succeed; Costs Judge Leonard found that whilst the defendant had failed to advise adequately on estimates, the claimant’s own refusal to conduct herself in a reasonable, realistic and cost-effective fashion made it impossible to set a limit upon the defendant’s recoverable costs [§12]. A final figure for the assessed bill was not established until 7 July 2025, with the process hampered by errors and misunderstandings on both sides [§13].
The bills, originally totalling £181,954.64, were assessed at £154,039.94, a reduction of £27,914.70 (15.34%) [§5]. As Ms Griffin had already paid £174,309.82, a refund of £20,269.88 was due to her [§5]. Importantly, it was established during the assessment that the defendant had incorrectly included in its bills disbursements to the value of £4,334.10, meaning the bills should have totalled £177,620.54 rather than £181,954.64 [§24]. Even without any other deduction, the defendant could never have claimed more than £3,310.72 as an outstanding balance, and the sum of £10,452.82 it had asserted as owing was substantially overstated [§24].
Costs Issues Before the Court
The primary issue was the award of costs for the solicitor-client assessment. The statutory framework in section 70(9) of the Solicitors Act 1974 prescribes that, unless the order for assessment provides otherwise, costs follow the “event” based on a one-fifth rule: if the bill is reduced by one-fifth or more, the solicitor pays the costs; if the reduction is less than one-fifth, the client pays [§7]. As the reduction was 15.34%, section 70(9) dictated that the defendant should receive its assessment costs unless special circumstances under section 70(10) justified a different order [§8].
This presumption could be displaced by section 70(10), which empowers the costs officer to certify special circumstances and the court to make such order as to costs as it sees fit [§7]. The claimant argued that a settlement offer she made constituted such a special circumstance. A secondary issue was the award of costs for the separate Part 8 application, the costs of which were reserved by the consent order and fell to be determined under the court’s general costs discretion in CPR 44.2 [§30].
Settlement Offers
Both parties accepted, for the purposes of this decision, that CPR Part 36 has no application to an assessment under section 70 of the 1974 Act. Costs Judge Leonard had previously given his reasons for reaching that conclusion in Zuhri v Vardags Ltd [2023] EWHC 3050 (SCCO), and neither party wished to reopen that point [§18]. The key part of the rationale behind that earlier decision was that the costs provisions of CPR Part 36 (as secondary legislation) are inconsistent with the costs provisions of subsections (9) and (10) of section 70 (as primary legislation) [§19]. There was, however, no obstacle to an offer not carrying Part 36 consequences being accepted so as to create a binding contract of settlement [§20].
On 23 May 2022, ten days after the assessment order, the claimant sent an offer headed “Part 36 Offer To Settle” proposing that the defendant’s bills be reduced by £28,000 in full and final settlement [§22]. The offer expressly stated it was intended to have Part 36 consequences and that, if accepted, the defendant would be liable for the claimant’s costs under CPR 36.13 [§22]. After deducting the £10,452.82 the defendant claimed as outstanding, the payment to the claimant would have been £17,547.18 [§22].
The defendant responded on 6 June 2022, questioning why the offer was “plus costs” given that a £28,000 reduction was less than the 20% needed to trigger the one-fifth rule in the claimant’s favour [§23]. The defendant offered instead to settle on a “drop hands” basis with no order as to costs, the outstanding balance of £10,452.82 to be written off [§23].
The Court’s Decision on Special Circumstances
Costs Judge Leonard found that the claimant’s 23 May 2022 offer was not sufficient to establish special circumstances displacing the one-fifth rule [§48]. The court accepted that, on the authority of Angel Airlines SA v Dean & Dean [2008] EWHC 1513 (QB), a clear without prejudice offer made in proper time and in proper form can constitute a special circumstance capable of reversing the statutory presumption in section 70(9) [§15, §32]. The judge accepted that the general principle from Wills v Crown Estate Commissioners [2003] 4 Costs LR 581 — that paying parties should make realistic settlement offers at the beginning of assessment proceedings and not at the end — was of general application to solicitor-client assessments as well as inter-party assessments, as recognised in Angel Airlines [§16–17].
However, the judge found the claimant’s offer was not in “proper form” [§35]. The offer provided for a reduction of less than one-fifth of the bills, yet required that, on acceptance, the defendant would lose its section 70(9) right to recover its assessment costs and would instead pay the claimant’s costs by reference to CPR 36.13(1) [§36]. In short, the offer represented a misconceived attempt to reverse the effect of section 70(9) through the operation of CPR Part 36, which was not possible [§37]. The judge found it unsurprising that the defendant was unwilling to accept it, and regarded the defendant’s “drop hands” offer as a more sensible proposition [§38].
The court also rejected the argument that accepting the offer would have left the defendant in a better position. While the billing refund under the offer (£17,547.18) was £2,722.70 less than the eventual refund of £20,269.88, acceptance would have required the defendant to pay the claimant’s costs — estimated at least £10,400 based on document time alone — and to forfeit its right to its own costs under the one-fifth rule [§27, §42–43]. The judge observed that the great majority of solicitors’ bills are reduced at least to some extent on a section 70 assessment, particularly in lengthy retainers involving hard-fought contentious matters, and that a solicitor whose costs are reduced by less than one-fifth may nonetheless regard the outcome as a success if it retains the right to assessment costs [§40]. The preservation of those rights, even subject to an element of uncertainty, outweighed the reduction of the billing refund by £2,722.70, or was at least sufficient to prevent the claimant from relying on the offer as establishing special circumstances [§47].
The judge added that even had he reached a different conclusion on special circumstances, it was unlikely that the claimant could have been awarded the costs of the estimates issue. The claimant’s case on estimates had been overstated and had involved unfounded and unfair allegations of impropriety against the defendant’s principal, Ms Kleyman, which the judge described as “regrettable”. Even after the estimates issue had been determined, the unfounded attacks on Ms Kleyman remained a feature of the proceedings [§49–50].
Conduct and the Award of Assessment Costs
The court awarded the defendant its costs of the assessment under the one-fifth rule, but reduced those costs to 80% to reflect the defendant’s conduct [§57].
The principal factor was the defendant’s negligent overbilling by £4,334.10, which should never have occurred [§53]. The claimant also identified a wider pattern of poor financial management: the defendant failed to produce a cash account as required by the assessment order in May 2022, failed again when ordered on 11 December 2024, and did not finalise a cash account until June 2025, even with some assistance from the claimant’s costs draftsman [§54]. The court found this poor record-keeping had impeded the clarification and resolution of the assessment, and that it should never have been necessary for the claimant to engage in a detailed assessment to discover that she had been overbilled [§55–56].
The Part 8 Costs
The Part 8 application and the assessment costs are distinct: section 70(9) governs only the costs of assessment, while the Part 8 costs fall to be determined under CPR 44.2 [§30]. However, there was logic in the parties’ mutual assumption that the Part 8 costs would follow the assessment costs, since the Part 8 claim was part and parcel of the claimant’s attempt to reduce the defendant’s bills [§31, §58].
The claimant argued she should receive the Part 8 costs on the basis that the defendant had initially opposed her application and only conceded shortly before the hearing. The court did not characterise the consent order as a capitulation, finding instead that it was a sensible compromise to have all disputes resolved within the assessment process [§59–60]. Nevertheless, the defendant could have recognised this at the outset rather than waiting until shortly before the hearing. In the exercise of discretion, the court ordered the claimant to pay 50% of the defendant’s Part 8 costs [§61].
Key Takeaway
This decision reinforces that settlement offers in Solicitors Act assessments must be crafted within the statutory framework, not around it. An offer which attempts to import CPR Part 36 consequences into a section 70 assessment — and which seeks to reverse the one-fifth rule through the backdoor — will fail the “proper form” test from Angel Airlines and will not constitute a special circumstance under section 70(10). Practitioners making settlement offers in solicitor-client assessments should ensure they do not attempt to reverse statutory costs entitlements, should make offers early and in realistic terms, and should be aware that a “drop hands” offer may carry more weight than an ambitious offer encumbered by misconceived Part 36 conditions. Separately, solicitors face tangible costs penalties for overbilling and poor record-keeping even where they prevail on the one-fifth rule.
