“I thought it would be helpful to set out the work that I will carry out for you and the fees that I will charge for this work. The work I will carry out The work you are instructing me to carry out is: Preparation of and representation at the PTR hearing on the10 July 2020 , and the 10 [sic] Final hearing commencing from the21 September 2020 , listed at the Central Family Court. For the avoidance of doubt, the fee covers the above mentioned work and therefore if the hearing concludes early or is adjourned to another date or does not go ahead for any reason beyond our control, then the full fee is still payable and another fee will be payable for any adjourned hearing. If subsequent work is needed on this matter, there will be another letter of agreement between us. Because I carry out all my work personally and cannot predict what other professional responsibilities I may have in the future, I cannot at this stage confirm that I will be able to accept instructions for all subsequent work that may be required by your case. My fees for this work My fee for accepting the instruction to appear as an advocate on the occasions described above will be£90,000 plus VAT. You and I agree that I will not attend the hearing unless you have paid the fee in advance. Total fees for my work as described above (exc. VAT):£90,000 VAT:£18,000 Total amount due:£108,000 The first payment of£12,550 is due by6 July 2020 The second payment of£12,550 is due by the10 July 2020 The third payment of£79,200 is due by the31 August 2020 The final payment of£3,700 and any other fees due in respect of additional work is due 28 days after receiving the final order Unless otherwise agreed failure to send payments on the aforementioned dates will mean that I will not be able to represent you at the hearings. Any additional work will be billed at my hourly rate of£500 plus VAT.” (The bold text and underlining is in the original). The work I will carry out The work you are instructing me to carry out is: My fees for this work Total fees for my work as described above (exc. VAT):£90,000 VAT:£18,000 Total amount due:£108,000 The first payment of£12,550 is due by6 July 2020 The second payment of£12,550 is due by the10 July 2020 The third payment of£79,200 is due by the31 August 2020 Any additional work will be billed at my hourly rate of£500 plus VAT.”
“61 Contracts and notices covered by this Part (1) This Part applies to a contract between a trader and a consumer. (2) This does not include a contract of employment or apprenticeship. (3) A contract to which this Part applies is referred to as a “consumer contract”.”
“2 Key definitions … (2) “Trader” means a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf. (3) “Consumer” means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession.”
“5 A term which has the object or effect of requiring that, where the consumer decides not to conclude or perform the contract, the consumer must pay the trader a disproportionately high sum in compensation or for services which have not been supplied.”
“(1) A term of a consumer contract may not be assessed for fairness under section 62 to the extent that— … (b) the assessment is of the appropriateness of the price payable under the contract by comparison with the goods, digital content or services supplied under it.” … (b) the assessment is of the appropriateness of the price payable under the contract by comparison with the goods, digital content or services supplied under it.”
“50. In my view, the core of the bargain was that the claimants’ fees were£90,000 and£45,000 , respectively, for preparing for and representing the claimant at the hearing. Accordingly, it would not have been open to the defendant to seek to challenge before the courts the level of fees nor the nature and extent of the work involved in preparation for and appearance at trial. 51. However, the term concerning the timing of payment and the consequences of the case not going ahead, although important, does not, in my view, fall within the parameters of section 64.”
“In so far as it is in plain, intelligible language, no assessment shall be made of the fairness of any term which– (a) defines the main subject matter of the contract, or (b) concerns the adequacy of the price or remuneration, as against the goods or services sold or supplied.”
“But there is an important “distinction between the term or terms which express the substance of the bargain and ‘incidental’ (if important) terms which surround them”: Chitty on Contracts, 28th ed (1999), vol 1, ch 15 “Unfair Terms in Consumer Contracts”, p 747, para 15-025. The object of the Regulations and the Directive is to protect consumers against the inclusion of unfair and prejudicial terms in standard-form contracts into which they enter, and that object would plainly be frustrated if regulation 3(2)(b) were so broadly interpreted as to cover any terms other than those falling squarely within it. In my opinion the term, as part of a provision prescribing the consequences of default, plainly does not fall within it. It does not concern the adequacy of the interest earned by the bank as its remuneration but is designed to ensure that the bank’s entitlement to interest does not come to an end on the entry of judgment.”
“regulation 3(2)(b) dealing with “the adequacy of the price or remuneration” must be given a restrictive interpretation. After all, in a broad sense all terms of the contract are in some way related to the price or remuneration. That is not what is intended. Even price escalation clauses have been treated by the Director as subject to the fairness provision: see Susan Bright, 20 LS 331, 345 and 349. It would be a gaping hole in the system if such clauses were not subject to the fairness requirement.”
“5 A term which has the object or effect of requiring that, where the consumer decides not to conclude or perform the contract, the consumer must pay the trader a disproportionately high sum in compensation or for services which have not been supplied.”
“In this paragraph the phrase “decides not to conclude or perform” includes where a consumer cancels a contract.”
“The decision is interesting because it highlights that problems over cancellation charges are not always associated with unreasonably long contracts, but may apply to a wide range of contracts.”
“A new paragraph should be added to the indicative list to cover terms which have the object or effect of permitting the trader to claim disproportionately high sums in compensation or for services which have not been supplied, where the consumer has attempted to cancel the contract.”
“It is not disputed that a term appearing in the list need not necessarily be considered unfair and, conversely, a term that does not appear in the list may nonetheless be regarded as unfair.”
“is best regarded as a check list of terms which must be regarded as potentially vulnerable.”
“The Annex [to the Directive] is not a black list: in some circumstances the listed terms may well be fair. However, a suggestion of unfairness hangs over the listed terms.”
“A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.”
“There are three independent requirements. But the element of detriment to the consumer may not add much. But it serves to make clear that the Directive is aimed at significant imbalance against the consumer, rather than the seller or supplier. The twin requirements of good faith and significant imbalance will in practice be determinative.”
“The requirement of significant imbalance is met if a term is so weighted in favour of the supplier as to tilt the parties’ rights and obligations under the contract significantly in his favour. This may be by granting to the supplier of a beneficial option or discretion or power, or by the imposing on the consumer of a disadvantageous burden or risk or duty. The illustrative terms set out in Schedule 3 to the Regulations [ie the then grey list] provide very good examples of terms which may be regarded as unfair; whether a given term is or is not to be so regarded depends on whether it causes a significant imbalance in the parties’ rights and obligations under the contract.”
“94 In my judgment, it is this dichotomy of potential circumstances that lies at the heart of the unfairness of the Payment Term. There is simply no mechanism within the term, nor to be found elsewhere in the contract, to provide for the contingencies identified above and illustrated by the particular facts of this case. The Payment Term is an “all or nothing” term, weighing 100% in favour of the barrister.”
“59 I am satisfied, after taking into account the matters referred to in section 62(5), that the term as to timing of payment and the consequences of the trial not going ahead created a significant imbalance in the parties’ rights and obligations under the contract. In short, the claimants were entitled to be paid far in advance for two weeks’ preparation and participation thereafter in a two-week trial. Even if there had been no work done whatsoever, the fees would have remained payable and subject to no element of reimbursement at all. Counsel would thus be entitled to take on alternative remunerative work during the relevant period and any sums thus earned would not go towards reducing the liability of the defendant. I accept that it is not always easy for counsel, particularly leading counsel, to find work at relatively short notice but it is by no means impossible. 60 In contrast, the financial risk of the trial not proceeding was borne entirely by the defendant. In particular, there was provision for additional work to be charged at£500 per hour for leading counsel but with no abatement in the event that no work whatsoever actually was carried out. It is not suggested that the contractual sums had been reduced to reflect, in advance, the possibility that the trial may not go ahead as listed. 61 As the judge below put it, the relevant term is an “all or nothing” term weighing 100% in favour of the barrister. Clearly, the imbalance was to the detriment of the consumer. I agree with his reasoning on this issue.”
“if the hearing concludes early or is adjourned to another date or does not go ahead for any reason beyond our control.”
“Moreover, the action in debt may have advantages over one for damages since an innocent party need not prove any loss caused by the defendant’s breach, merely that he has earned the sum, and the claim cannot be reduced for being too remote or for the innocent party’s failure to mitigate loss.”
“(1) The test of “significant imbalance” and “good faith” in article 3 of the Directive (regulation 5(1) of the 1999 Regulations) “merely defines in a general way the factors that render unfair a contractual term that has not been individually negotiated”: para 67. A significant element of judgment is left to the national court, to exercise in the light of the circumstances of each case. (2) The question whether there is a “significant imbalance in the parties’ rights” depends mainly on whether the consumer is being deprived of an advantage which he would enjoy under national law in the absence of the contractual provision: paras 68, 75. In other words, this element of the test is concerned with provisions derogating from the legal position of the consumer under national law. (3) However, a provision derogating from the legal position of the consumer under national law will not necessarily be treated as unfair. The imbalance must arise “contrary to the requirement of good faith”
“whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in individual contract negotiations.”
“In making an assessment of good faith, regard shall be had in particular to— (a) the strength of the bargaining positions of the parties; (b) whether the consumer had an inducement to agree to the term; (c) whether the goods or services were sold or supplied to the special order of the consumer, and (d) the extent to which the seller or supplier has dealt fairly and equitably with the consumer.”
“The requirement of good faith in this context is one of fair and open dealing. Openness requires that the terms should be expressed fully, clearly and legibly, containing no concealed pitfalls or traps. Appropriate prominence should be given to terms which might operate disadvantageously to the customer. Fair dealing requires that a supplier should not, whether deliberately or unconsciously, take advantage of the consumer’s necessity, indigence, lack of experience, unfamiliarity with the subject matter of the contract, weak bargaining position or any other factor listed in or analogous to those listed in Schedule 2 to the Regulations. Good faith in this context is not an artificial or technical concept; nor, since Lord Mansfield was its champion, is it a concept wholly unfamiliar to British lawyers. It looks to good standards of commercial morality and practice.”
“Schedule 2 to the Regulations, which explains the concept of good faith, provides that regard must be had, amongst other things, to the extent to which the seller or supplier has dealt fairly and equitably with the consumer. It is an objective criterion…. And helpfully the commentary to Lando & Beale, Principles of European Contract Law, Parts I and II (combined and revised 2000), p 113 prepared by the Commission of European Contract Law, explains that the purpose of the provision of good faith and fair dealing is “to enforce community standards of decency, fairness and reasonableness in commercial transactions”; a fortiori that is true of consumer transactions.… The examples given in Schedule 3 convincingly demonstrate that the argument of the bank that good faith is predominantly concerned with procedural defects in negotiating procedures cannot be sustained. Any purely procedural or even predominantly procedural interpretation of the requirement of good faith must be rejected.”
“A contractual term in a consumer contract is unfair if “contrary to the requirement of good faith [it] causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer”
“In determining whether the seller could reasonably assume that the consumer would have agreed to the relevant term in a negotiation, it is important to consider a number of matters. These include, at point AG75: “whether such contractual terms are common, that is to say they are used regularly in legal relations in similar contracts, or are surprising, whether there is an objective reason for the term and whether, despite the shift in the contractual balance in favour of the user of the term in relation to the substance of the term in question, the consumer is not left without protection.” ” “whether such contractual terms are common, that is to say they are used regularly in legal relations in similar contracts, or are surprising, whether there is an objective reason for the term and whether, despite the shift in the contractual balance in favour of the user of the term in relation to the substance of the term in question, the consumer is not left without protection.” ”
“308 As to whether the imbalance was contrary to the requirement of good faith, the court [ie in Aziz], at para 76, in agreement with the Advocate General held that: “in order to assess whether the imbalance arises ‘contrary to the requirement of good faith’, it must be determined whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to the term concerned in individual contract negotiations.” 309 That test is significantly more favourable to the consumer than would be applied by a court in this country under the penalty doctrine. Whereas the starting point at common law is that parties should be kept to their bargains, and it is for those objecting that a clause is penal to establish its exorbitant nature, the starting point of the Directive is that the consumer needs special protection, and it is for the supplier to show that a non-core term which is significantly disadvantageous to the consumer, as compared with the ordinary operation of the law without that term, is one which the supplier can fairly assume that the consumer would have agreed in individual negotiations on level terms. The burden is on the supplier to adduce the evidence necessary to justify that conclusion.” “in order to assess whether the imbalance arises ‘contrary to the requirement of good faith’, it must be determined whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to the term concerned in individual contract negotiations.”
“63 The issue of fair dealing in this case must take into account a number of features. Firstly, save for some enquiries from the defendant aimed at clarification, the terms reached between the parties were not the product of individual negotiation. The letter in which they are to be found is worded in the form of a fait accompli and the defendant, as will almost invariably be the case in direct access arrangements, was not separately legally advised. Secondly, the risks of any given trial being rendered ineffective are much more familiar to members of the legal profession than to lay clients. They would have known, for example, that the fact that a trial had already been adjourned once provided no assurance that it could not happen again. Thirdly, the means by which a direct access barrister could provide some means of reimbursement in the event of the trial not proceeding fell also (or ought to have fallen) within the knowledge of the claimants. Fourthly, as is the case in most litigation, and particularly family proceedings, the lay client is almost inevitably placed in a stressful, dependant and potentially vulnerable position. I do not overlook the fact that the claimants clearly considered the defendant to be a demanding and difficult client but this feature does little or nothing to redress the imbalance in the relationship between professional and lay client. One of the occupational hazards of direct access arrangements is that the absence of any instructing solicitor inevitably exposes counsel more acutely to the unfiltered, uncomfortable and persistent demands of the importunate client. 64 I readily accept that the relevant term was clear and brought openly to the attention of the defendant but that is not a feature which is sufficient, of itself, to establish that the requirement of good faith has been fulfilled.”
“Whereas, however, as they now stand, national laws allow only partial harmonization to be envisaged; whereas, in particular, only contractual terms that have not been individually negotiated are covered by this Directive; whereas Member States should have the option, with due regard to the Treaty, to afford consumers a higher level of protection through national provisions that are more stringent than those of this Directive.”
“1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer. 2. A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract. The fact that certain aspects of a term or one specific term have been individually negotiated shall not exclude the application of this Article to the rest of a contract if an overall assessment of the contract indicates that it is nevertheless a pre-formulated standard contract. Where any seller or supplier claims that a standard term has been individually negotiated, the burden of proof in this respect shall be incumbent on him.”
“application to all consumer contract terms, whether or not individually negotiated.”
“I wish to make it plain that my adjudication on this issue is not to be taken as an imputation of professional impropriety whatsoever on the part of the claimants. Subjectively, they doubtless considered that there were sound commercial reasons to seek to protect themselves in clear terms against the risk of not being paid in full, regardless of whatever procedural course the ligation might subsequently take and, in particular, against the adverse consequences of any and all potential threats to the viability of the trial.”
“62 Requirement for contract terms and notices to be fair (1) An unfair term of a consumer contract is not binding on the consumer. 67 Effect of an unfair term on the rest of a contract Where a term of a consumer contract is not binding on the consumer as a result of this Part, the contract continues, so far as practicable, to have effect in every other respect.”
“By the operation of the statutory regime, an unfair term must be deemed never to have existed. Where a term is unfair, the whole of that term must be removed and not just the unfair aspects of that term. Otherwise this would amount to amending the term which would be impermissible.”
“My fees for this work My fee for accepting the instruction to appear as an advocate on the occasions described above will be£90,000 plus VAT. You and I agree that I will not attend the hearing unless you have paid the fee in advance. Total fees for my work as described above (exc. VAT):£90,000 VAT:£18,000 Total amount due:£108,000 The first payment of£12,550 is due by6 July 2020 The second payment of£12,550 is due by the10 July 2020 The third payment of£79,200 is due by the31 August 2020 The final payment of£3,700 and any other fees due in respect of additional work is due 28 days after receiving the final order Unless otherwise agreed failure to send payments on the aforementioned dates will mean that I will not be able to represent you at the hearings.”
“71 … But once the claimants are precluded from relying upon the payment term, the contract falls to be treated as providing for a lump sum payment for the services of preparation and appearance at trial. The parties could have agreed a divisible contract but they did not. 72 This background brings into focus the issue of partial performance of entire obligations which is addressed in Chitty at para 24-029: “Where a party has performed only part of an entire obligation it can normally recover nothing, neither the agreed price, since it is not due under the terms of the contract, nor any smaller sum for the value of its partial performance, since the court has no power to apportion the consideration.” ” “Where a party has performed only part of an entire obligation it can normally recover nothing, neither the agreed price, since it is not due under the terms of the contract, nor any smaller sum for the value of its partial performance, since the court has no power to apportion the consideration.” ”
“24 Under the terms of a contract for services, the general rule is that they are to be paid for as and when rendered. However, it is open to the parties to stipulate for prepayment of part or all of the price. Where this is so, an action for the price lies as soon as the date for payment has arrived. As Lord Alverstone CJ observed in Workman, Clark & Co Ltd v Lloyd Brazileño[1908] 1KB 968 , 976—977: “where an agreement provides for the payment of a sum of money, and does not make the performance of the thing which is the consideration for the payment a condition precedent to or concurrent with the payment, an action may be maintained for the recovery of the sum of money without such performance.” 25 Thus, by the operation of the common law, the claimants, at least prima facie, became entitled to claim the full amount of their fees on 31 August regardless of the amount of work, if any, they had then done.” “where an agreement provides for the payment of a sum of money, and does not make the performance of the thing which is the consideration for the payment a condition precedent to or concurrent with the payment, an action may be maintained for the recovery of the sum of money without such performance.”
“It should be noted that the right to be paid for services, where that right is not to an agreed specified sum, is the right to a quantum meruit, which means “as much as he deserved” or, as it is commonly expressed in the law of contract, a reasonable remuneration (or a reasonable charge or a reasonable price). The Latin label, which is a description of the remedy, transcends the boundary between contract and unjust enrichment. That is, on the one hand, there can be a contractual quantum meruit, and, on the other hand, there can be a quantum meruit that effects restitution of an unjust enrichment. That label does not in itself explain whether it is a contract or an unjust enrichment that is triggering the right to a quantum meruit.”
“As, if I employ a person to do any business for me, or perform any work; the law implies that I undertook, or contracted, to pay him as much as his labour deserves.”