"Endeavour’ To Notify" ≠ Duty To Halt | Court Upholds Solicitors’ Fees Above Initial Estimate

SPANAKIS v SCHILLINGS INTERNATIONAL LLP [2025] EWHC 873 (KB)

Spanakis v Schillings International LLP [2025] EWHC 873 (KB) addressed a costs assessment appeal concerning a solicitor’s fee estimate. The High Court considered whether Schillings International LLP’s billing exceeded a contractually provided cost estimate for legal services. The appellant challenged the Costs Judge’s determination that the respondent’s bill of £15,000 plus VAT was reasonable, despite substantially exceeding the initial £10,000 Phase One estimate. The court examined the contractual obligations relating to cost estimates, applying principles from Mastercigars Direct Ltd v Withers LLP regarding client reliance and reasonable expectations. Key issues included the respondent’s duty to notify the client of potential cost overruns and the appellant’s reliance on the original estimate. The judge found that the respondent’s email of 28 March 2022 sufficiently updated the appellant about potential cost overruns, and the appellant continued to instruct the solicitor despite being informed. Furthermore, the court determined that the appellant did not demonstrate sufficient reliance on the original estimate to limit the recoverable costs. Accordingly, Mrs Justice Tipples dismissed the appeal, confirming the Costs Judge’s original assessment that the full bill was reasonable and recoverable under the parties’ contractual agreement.

"The obligation on the respondent is therefore that they shall “endeavour” to notify the client, in this case the appellant, if the estimate is likely to be exceeded. The obligation is no more than that, and the Standard Terms of Business do not provide that, if the respondent fails to tell a client in advance that the estimate is likely to be exceeded, then any resulting addition incurred to the client’s costs will be irrecoverable.”

Citations

Mastercigars Direct Ltd v Withers LLP [2007] EWHC 2733 (Ch) A solicitor’s costs estimate serves as a benchmark in assessing the reasonableness of charges; a substantial excess over the estimate requires a satisfactory explanation, and the court may reduce recoverable costs if it is unreasonable to expect the client to pay the full bill. Mastercigars Direct Ltd v Withers LLP [2009] 3 Costs LR 393 Reliance on a solicitor’s costs estimate may affect the assessment of what is reasonable for the client to pay, even absent binding estoppel; the court must assess whether and how the client relied, and may adjust the bill accordingly as a matter of judgment. Leigh v Michelin Tyre plc [2003] EWCA Civ 1769; [2004] 1 WLR 846 Reliance on a costs estimate may be relevant in inter partes costs assessments as a factor influencing what it is reasonable for the paying party to pay, even if the reliance does not amount to an estoppel. Wong v Vizards [1997] 2 Costs LR 46 Excessive solicitor-client costs may be disallowed notwithstanding that each individual item was reasonable, if the total bill exceeds what it is reasonable in all the circumstances for the client to pay. Henderson v Foxworth Investments Ltd [2014] UKSC 41 An appellate court will not interfere with findings of fact or evaluative judgments of the trial judge unless satisfied the decision was plainly wrong or could not reasonably be justified. Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 An appeal court should not overturn trial judge findings without strong grounds; restraint must be exercised when reviewing factual or discretionary decisions important to assessment outcomes.

Track allocation housing disrepair CPR 46.13 settlement sum costs restriction SCCO

MRO fee markup cap 25% detailed assessment personal injury Senior Courts Costs Office

Security for costs refused CPR 25.27 very high probability success excessive estimate King's Bench

IPEC scale costs transfer Patents Court PD 30 para 9.2 costs caps Court of Appeal

Costs budget variation CPR 3.15A promptness significant development unfair prejudice Chancery Division

Costs budgeting inter partes proportionality high hourly rates AI disclosure Patents Court CPR 3E

Beneficiary personal liability section 71(3) Solicitors Act 1974 indemnity costs VAT self-supply SCCO

Summary assessment indemnity costs unless order payment on account disclosure default Chancery Division

Provisional assessment set aside CPR 3.1(7) points of dispute filing duty PD 47 para 14.3 SCCO

Fixed recoverable costs police claims CPR 26.9(10)(e) intentional tort exemption

Key Points

Where a solicitor provides a costs estimate that is later exceeded, the estimate is not binding but is a relevant factor when determining the reasonable remuneration recoverable from the client; the greater the disparity, the more robust the explanation required. [47]
The court may take account of whether and how the client relied on a solicitor’s estimate when assessing what it is reasonable for the client to be expected to pay; however, reliance is not required to be proven on the balance of probabilities and may be established by demonstrating that an opportunity to act differently was deprived. [46–47, 49–50]
An estimate stated to be subject to variation and made under terms expressly stating it is non-binding and does not set an upper limit does not prevent a solicitor from recovering costs in excess of the estimate, particularly where the client was notified of potential overruns and authorised continued work. [42–44]
The paying party bears the burden of proving reliance on a costs estimate for the purpose of limiting recoverable costs on detailed assessment; the court is not required to conduct an elaborate or detailed evidential inquiry in making this determination. [56–57]
A failure by solicitors to provide timely notice of an estimate overrun does not automatically render excess costs irrecoverable unless it can be shown that, taking all the circumstances into account, it is unreasonable for the client to be required to pay the full amount claimed. [44–45, 56]

“Therefore, under the terms of the contract between the parties, there was nothing contractually wrong about the respondent’s approach in sending the appellant the email in the terms it did on 28 March 2022 at 10:43… There was no such obligation on the respondent and, on top of that, the judge made findings of fact that when the appellant was put on notice that the costs were prima facie overrunning, he instructed them to continue working, and raised no specific objection to this.”

Key Findings In The Case

The court found that the estimate of £10,000 plus VAT for “Phase One” of the legal work was expressly subject to caveats within the retainer documentation, including that it was not binding, did not set an upper limit, and was dependent on the nature and scope of the instructions ultimately provided by the client [17(a), 27–28].
The appellant was put on notice that the respondent’s costs were likely to exceed the original estimate by an email dated 28 March 2022, and despite this, he instructed the respondent to continue the work, including by submitting additional materials and requesting urgent progress on a letter before claim [17(c)–(e), 30–32].
The court found that there was no express or implied reliance by the appellant on the estimate provided, and no evidence that he would have acted differently had he been given a higher estimate; consequently, the disparity between the estimate and the final bill did not justify limiting the solicitor’s recoverable costs [17(d), 19, 56–58].
The judge accepted that the costs incurred exceeded the estimate primarily due to the volume and nature of the materials the appellant delivered to the respondent across multiple tranches, which required unanticipated additional work, including repeated advice on merits [16, 17(b), 33].
The respondent was not contractually required to suspend work or obtain fresh instructions before exceeding the estimate, as the obligation in paragraph 8.3 of the terms of business was to “endeavour to notify” if the estimate was likely to be exceeded; this clause did not create a binding cap or limit recoverability in the event of non-performance [42–44].

“As a matter of fact, the information, instructions, provided by the [appellant] for the [respondent] were not quite as anticipated reasonably by the defendants in the mandate that there was necessarily more work incurred. And more particularly, that the ultimate advice, namely whether there is an actionable claim or not, was preferred twice much to the [appellant’s] disappointment.”

Background

The case concerned an appeal brought by Mr Emmanouil Spanakis against an order of Costs Judge Whalan dated 29 August 2023, following a solicitor-client assessment under section 70(2) of the Solicitors Act 1974. Mr Spanakis had instructed Schillings International LLP in relation to a defamation and breach of confidence matter. The parties entered into a retainer agreement on 9 February 2022, which included an estimate for the first phase of work (“Phase One”) of up to £10,000 plus VAT.

An invoice for £15,000 plus VAT was rendered by Schillings on 6 April 2022, covering work carried out between 29 November 2021 and 31 March 2022. Mr Spanakis disputed the invoice on the grounds that it exceeded the initial estimate, that the work was substandard, and that no adequate warning had been given before costs escalated. The matter proceeded to a detailed assessment before the Costs Judge, who allowed the bill at £19,141.80 (including VAT). Mr Spanakis appealed.

Issues on Appeal

The key issues on appeal concerned whether the costs should have been limited to the initial estimate, and more broadly, how solicitor-client cost estimates should be treated when costs exceed them. The appeal required analysis of:

Whether Schillings had breached its contractual obligation to inform the client if costs would exceed the estimate;
Whether reliance on the estimate was a necessary condition to limiting the recoverable costs;
Whether Mr Spanakis had in fact relied on the estimate when instructing the firm;
Whether the court should have exercised discretion to limit recovery due to the excessiveness of the charges or the timing of notification.

Appellant’s Arguments

Mr Spanakis advanced five grounds of appeal. Central to his case was that the initial estimate created a legitimate expectation or implied cap, and that the respondent failed to comply with its obligation to notify him if the estimate was likely to be exceeded. He submitted that the court below had:

Failed to consider his position as a consumer and apply the Consumer Rights Act 2015.
Misinterpreted clause 8.3 of the retainer, which he argued imposed a firm duty to provide notice before costs could be increased.
Wrongly concluded that an email of 28 March 2022 constituted sufficient notice.
Erred in law by treating reliance as a requirement for challenging costs above the estimate.
Exercised discretion improperly by failing to account for relevant facts.

Respondent’s Arguments

Schillings contended that the initial estimate was expressly non-binding and subject to assumptions. Clause 8.3 only required the firm to “endeavour” to provide notice. The 28 March 2022 email, sent when just over half the estimate had been used, was said to amount to fair warning that costs would be exceeded.

Schillings further submitted that the estimate could not reasonably have been viewed as a cap, and that the client continued to instruct the firm even after that update, demonstrating both acquiescence and an absence of reliance. The fees claimed were reasonable in light of the additional work, urgency, and complexity that arose during the instruction.

Judgment

Mrs Justice Tipples dismissed the appeal in its entirety. She found that the retainer did not impose a strict duty to provide advance notification before exceeding the estimate. The obligation in clause 8.3 was limited to an obligation to “endeavour” to provide notice. While earlier notification might have been better practice, a failure to notify sooner did not render subsequent costs unrecoverable.

The judge held that reliance on the estimate was necessary to support an argument that the fees should be limited. Mr Spanakis had not shown that he would have acted differently had he been given a more accurate forecast earlier. Rather, after receiving the 28 March 2022 email, he had urged the firm to continue with urgency. This undermined any suggestion of reliance.

At paragraph 94 of the judgment, the court expressly found that Spanakis was aware of the growing costs and continued to instruct the firm. There was no evidence of any detrimental reliance on the original estimate. The judge concluded that the work done and charges claimed were reasonable in all the circumstances, including the scope of work ultimately performed and the evolving instructions given by the appellant.

Analysis and Commentary

This judgment provides a significant clarification of how estimates in solicitor-client relationships are treated in detailed assessment proceedings. The High Court reaffirmed that:

An estimate is not a cap unless expressly stated to be such. The use of caveats or terms such as “we will endeavour to inform you” do not give rise to absolute obligations or hard ceilings on costs.
A client’s ability to resist paying costs in excess of an estimate depends not only on the size of the overrun but on the reasonableness of the solicitor’s actions and the presence (or absence) of reliance.
Reliance must be demonstrated with evidence of a change in position or lost opportunity. Mere expectation that costs would remain within the estimate is insufficient.

The decision is particularly valuable for legal practitioners in the way it distinguishes between best practice and enforceable obligation. It recognises that while good client care requires timely and accurate cost updates, the absence of such updates does not automatically disentitle solicitors to recover reasonable fees.

From a costs law perspective, this case reaffirms the importance of clear, well-drafted engagement letters. The inclusion of explicit language confirming that estimates are not binding and may be revised offers protection against challenges where final costs significantly exceed early forecasts. Conversely, it places an evidential burden on clients seeking to rely on estimates as a basis to resist payment.

The involvement of a specialist costs judge at first instance and the appellate endorsement by the High Court makes this a strong authority on the principles governing solicitor-client assessments. It is likely to be cited in future disputes over fees where the scope of a solicitor’s duty to warn of cost increases is in question.

Conclusion

The High Court’s dismissal of Mr Spanakis’s appeal confirmed that the cost estimate given by Schillings was not a binding limit and that the firm had not breached its contractual obligations. The ruling affirmed that reliance is a crucial component in any argument seeking to restrict recovery of fees beyond an initial estimate. This judgment provides clear, authoritative guidance for costs practitioners and solicitors alike, reinforcing the position that a properly drafted retainer and demonstrable reasonableness in billing will withstand scrutiny, even where costs exceed early projections.

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