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Rees; Rees v Gateley Wareing (a firm); Gateley LLP [2013] EWHC 3708 (Ch)

Key areas: champerty; maintenance; Solicitor/Own client; High Court

This was a dispute between a solicitor and their ex-clients.  The ex-clients sued for negligence; the solicitors counter-claimed for unpaid fees under a contingency agreement.

The retainer stated that the solicitors would charge £5,000 plus “5% of any monies recovered on your behalf, up until 22 May 2003. Thereafter, this firm’s charges shall be 6.25% of any monies recovered from 23 May 2003 until 22 May 2004. From 23 May 2004 onwards, this firm’s charges shall be 7.5% of any monies recovered”, with credit being given for the initial £5,000.00.

This was later amended to 5% up to 22 May 2003, and thereafter shall be subject to review, but with a minimum of 5%. The other percentages were removed.

The Court upheld the validity of the agreements, based upon the ex-clients knowledge at the time.  However, it held that although it was also valid in relation to subsequent litigation that was conducted on behalf of the ex-clients, it did not provide for a fee to be payable.  It also rejected arguments that the agreement was void by champerty or maintenance.

The Court emphasised that it was not making a ruling on whether the agreement was contentious or non-contentious, but stated that this was relevant.

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