The Senior Courts Costs Office’s decision in Perrett v Wolferstans LLP [2026] EWHC 50 (SCCO) confirms that fixed recoverable costs do not establish the benchmark for fair remuneration between solicitor and client.
Background
The proceedings involved a claim under the Solicitors Act 1974 by Mr Ryan Perrett against his former solicitors, Wolferstans LLP. The claim concerned the assessment of costs billed under a conditional fee agreement (CFA) relating to a personal injury claim. The profit costs in the solicitor’s statutory bill, dated 13 April 2022, were claimed at £4,800 (including VAT), with an additional success fee of £1,775.85. The recoverable costs from the opponent in the underlying claim were fixed at £900 [§7].
A reserved judgment on preliminary issues was delivered on 17 January 2025 [§1]. A subsequent hearing on 21 May 2025 dealt with the remaining “line by line” items of the bill [§1]. Following that detailed assessment, the profit costs were reduced from the claimed figure to a sum in the region of £3,850 to £4,000 (including VAT), with the success fee being allowed in full [§1]. For the purposes of the final issue, the court treated the assessed figure as £3,864 [§2].
The sole remaining issue for determination was a holistic one. The court needed to “step back” and consider whether the sum arrived at after the item-by-item assessment was, in all the circumstances, a fair and reasonable sum for the purposes of the Solicitors’ (Non-Contentious Business) Remuneration Order 2009 (“the 2009 Order”) [§3]. This required an overall evaluation of the costs, taking into account the factors listed in Article 3 of the 2009 Order and any other relevant circumstances.
Costs Issues Before the Court
The core costs issue was whether the profit costs assessed at £3,864 (treated as the assessed figure for simplicity), having been found reasonable on an item-by-item basis, should be subject to a further reduction to reflect broader considerations of fairness. The claimant’s central argument was that the costs were unreasonable because they vastly exceeded the fixed recoverable costs of £900 that could be recovered from the opponent [§10]. He contended that the solicitors had a duty to clearly inform him of this potential shortfall and that their failure to do so meant the higher charges were not fair and reasonable remuneration.
The issue engaged the proper approach to assessing non-contentious business costs under the 2009 Order, specifically the weight to be given to the time spent versus other factors, and the relevance of the level of inter partes recoverable costs to the solicitor-client assessment.
The Parties’ Positions
The Claimant’s Position: Mr Carlisle, for the claimant, argued that the court should make an overall assessment of a fair and reasonable sum. He submitted that the fixed recoverable costs regime represented a “swings and roundabouts” scheme intended to provide fair remuneration for solicitors when taken as a whole, citing Nizami v Butt and Kilby v Gawith [§4–6]. The claimant contended that a solicitor’s failure to clearly warn a client that costs incurred at hourly rates would likely exceed the fixed recoverable sum was a failure to look after the client’s interests [§10]. He drew an analogy with the duty identified in St James v Wilkin Chapman regarding costs management and budget overspends [§10–11]. The claimant argued that such a failure rendered the costs “unusual or unreasonable” [§11]. He also relied on the outcome in Belsner v Cam Legal Services, where the Court of Appeal allowed only slightly more than fixed recoverable costs, as providing context for where the court should intervene [§8–9].
The Defendant’s Position: Mr Brighton, for Wolferstans LLP, submitted that the claimant’s arguments largely pertained to preliminary issue 5, which had already been decided [§13]. On the substantive point, he argued there was no proper analogy between costs budgeting and fixed recoverable costs, as the latter’s final figure is only known at the end of the case [§14]. The defendant maintained that the client care documentation, which included a clear 25% cap on deductions from damages, provided sufficient information for informed consent, relying on the decision in Swann v Slater & Gordon LLP [§15]. He emphasised that the hourly rates charged were at or below the guideline hourly rates and that the claimant was aware of the contractual terms, having signed a confirmation upon settlement [§17]. The defendant’s position was that the contractually agreed terms should govern and that the sum assessed was fair.
The Court’s Decision
Senior Costs Judge Rowley dismissed the claimant’s arguments and held that the sum of £3,864 was fair and reasonable remuneration under the 2009 Order [§26].
The court first reiterated the methodology set out in its January judgment. Where a retainer is based on hourly rates, the starting point is to assess the reasonableness of the time spent and the rates charged. Only after completing that exercise should the court “step back” to consider if the resulting figure requires adjustment in light of all the circumstances, particularly the factors in Article 3 of the 2009 Order [§18–19]. The judge distinguished the 1970s authorities like Treasury Solicitor v Regester, where other factors such as property value “dwarfed” the time spent, finding them inapplicable to the present case [§19].
The court rejected the claimant’s core proposition that inter partes fixed recoverable costs represented the benchmark for fair solicitor-client remuneration. It held that the “swings and roundabouts” fairness described in Nizami and Kilby related to the scheme of recovery between litigating parties, not to the contractual relationship between solicitor and client [§22–23]. It noted the obiter remarks of Lavender J in SGI Legal LLP v Karatysz that what is usual between solicitor and client is a very different question from what is recoverable inter partes [§23–24]. The court further observed that the concept of “unusual costs” under CPR 46.9 relates to contentious business and cannot simply be transferred to non-contentious business to create a presumption of unreasonableness based on exceeding recoverable costs [§24].
The court found that the budgets/fixed costs analogy advanced by the claimant was not sustainable. Budgets are prepared by solicitors who have a reasonable idea of costs at the outset, whereas the level of fixed recoverable costs is only known at the conclusion of the case [§14].
The judge found that the requirement to keep the client informed was satisfied by the clear contractual term capping the claimant’s liability at 25% of damages [§25]. The court had previously found the claimant understood this term. While more detailed explanation of the potential shortfall would have been preferable, its absence did not render the ultimately charged costs unfair or unreasonable. The judge considered the hourly rates and reduced the junior fee earners’ rates. Some time was also disallowed on the item-by-item assessment [§20]. These matters having already been addressed, it would be incorrect to take them into account again in deciding whether the resulting figure ought to be adjusted further [§20].
Consequently, having factored in the relevant considerations through the detailed assessment, no further global adjustment was warranted. The sum of £3,864 was determined to be fair and reasonable to both the solicitor and the client [§26].
Solicitor and client assessments: Introduction
Costs Estimates And The Relevance Of A Costs Budget As Between Solicitor And Client
The Consequences Of An Inadequate Costs Estimate And A Flawed Risk Assessment
