Emmanouil Spanakis v Schillings International LLP [2025] EWHC 873 (KB)

[2025] EWHC 873 (KB)Case No KA-2023-000184
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ON APPEAL FROM COSTS JUDGE WHALAN
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 14/04/2025
Before
Mrs Justice Tipples DBE(sitting with Costs Judge Leonard as an assessor)
Between
EMMANOUIL SPANAKISAppellantSCHILLINGS INTERNATIONAL LLPRespondent
Mr Rupert Cohen (instructed by Brecher LLP) for AppellantMr Martyn Griffiths (instructed by Schillings International LLP) for RespondentHearing Hearing date: 29 th January 2025
Approved JudgmentThis judgment was handed down remotely at 10.00am on Monday 14 April 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................MRS JUSTICE TIPPLES DBE

Introduction

[1]This is an appeal against the Order of Costs

Judge Whalan on 29 August 2023 in which he ordered that:

“(1) The [respondent’s] bill is assessed in the sum of £19,141.80, including VAT, not including interest. Pursuant to the invoice delivered by the [respondent] to the [appellant], the [appellant] must pay to the [respondent] the sum of £18,000.00, including VAT, not including interest. (2) The [appellant] must pay the [defendant’s] costs of the assessment, assessed summarily in the sum of £24,300.00 (no VAT).”
[2]The appellant was granted permission to appeal on 27 June 2024.[3]The appellant commenced these proceedings by Part 8 Claim form on 26 July 2022. He applied for, amongst other things, an order in standard form for the detailed assessment of the bill dated 31 March 2022 and bearing the bill number 23834 and delivered to him by the respondent (“the Bill”).[4]There is no dispute that, as alleged in the details of claim, the appellant is a private individual residing in central London who instructed the respondent firm of solicitors to act on his behalf in proceedings against another private individual for defamation and unauthorised disclosure of confidential information. The appellant retained the respondent under a retainer dated 10 December 2021, which he signed on 9 February 2022. On 6 April 2022 the appellant received an email from the respondent attaching the Bill charging £15,000 plus VAT of £3,000 for work done for the period 29 November 2021 to 31 March 2022. On the same day as he received the Bill, the appellant wrote to the respondent disputing the fees charged.[5]In his claim form the appellant maintained that the fees charged were excessive and unreasonable and he disputed the fees charged by the respondent on the basis that(1) the fees charged were unreasonable in amount;(2) some of the work undertaken was not authorised and was unreasonably incurred; and(3) the work undertaken was sub-standard. Accordingly under section 70(2) of the Solicitors Act 1974 the appellant applied for an order that the Bill be assessed.[6]The respondent provided a breakdown of its costs on 20 October 2022, totalling £16,641.00. Having received this, the appellant filed his points of dispute in respect of the respondent’s breakdown of costs on 1 November 2022, and the respondent filed its points in reply on 16 November 2022.[7]The points in dispute identified an issue which was referred to as “Preliminary Point (1 ) – Estimate of Costs”. The issue here was whether the appellant’s costs should be limited in any way to a costs estimate provided in respect of part of the work anticipated, which was set out in the retainer agreed between the parties on 9 February 2022 (“the Estimate”).[8]The appellant did not seek any directions for evidence in order to resolve this issue before the judge. Rather, the matter proceeded on the basis that the issues would be determined on the papers with submissions from the parties’ respective legal representatives.[9]The assessment of the Bill came before Costs Judge Whalan on 29 August 2023 and, having heard submissions from the costs lawyer for the appellant and counsel for the respondent, he determined the Estimate issue in the respondent’s favour and gave a short ex tempore judgment. He went on to determine the other points of dispute, assessing the respondent’s reasonable costs, by reference to the respondent’s breakdown at a sum in excess of the amount billed.[10]Before turning to the grounds of appeal, it is important to remember that the appellant has not challenged the judge’s determination that the amount billed by the respondent of £15,000 plus VAT was a reasonable sum.

Grounds of appeal

[11]The appellant maintains that the judge was wrong to determine that it was reasonable to expect the appellant to pay £15,000 plus VAT, given the Estimate he was provided with by the respondent.[12]The appellant relies on the following five grounds of appeal:a. Ground 1: The judge failed to take into account the fact that the appellant was a consumer and/or misconstrued the Estimate.b. Ground 2: The judge failed to take into account the respondent’s contractual promise:(i) to keep the appellant informed if costs varied from the Estimate; and(ii) notify the appellant if the Estimate was likely to be exceeded.c. Ground 3: The judge’s conclusion that: (i) the appellant did not rely on the Estimate; and (ii) the email dated 28 March 2022 was a “notice of an upward revision” to the Estimate was not open to him on the facts.d. Ground 4: In any event, the judge made an error of law in concluding that reliance was a necessary ingredient.e. Ground 5: The judge failed to take all relevant factors into account and came to a conclusion which was outwith the ambit of his discretion.[13]The Estimate referred to in the grounds of appeal is the estimate of fees for “Phase One” which was provided by the respondent to the appellant in a mandate included in the retainer documentation signed by the appellant on 9 February 2022. This was in the same terms as a proposed mandate provided to him by the respondent on 10 December 2021.[14]The court was provided with detailed skeleton arguments from each party in advance of the hearing and assisted by oral submissions from counsel at the hearing.[15]In relation to ground 1 the appellant conceded at the hearing that he had not advanced any argument before the judge that he was a consumer and that the Consumer Rights Act 2015 applied. This, he accepted, was not an argument raised in his points of dispute and was raised for the first time on appeal and, in the light of that, Mr Cohen for the appellant wisely did not pursue this point with any force in his oral submissions (and, in any event, in relation to the facts of this case this point does not add anything to the other arguments advanced by the appellant, and it is not therefore a point that needs to be decided).

Facts

[16]The judge summarised the key facts at paragraphs 2, 3, 9 to 12 of his judgment and the relevant facts can be taken from there:
“[2.] The issue concerns an estimate of costs provided by the [respondent] to the [appellant] as set out in terms of business described as a mandate produced originally, or at least initially, to the parties. But not actually circulated and signed until 13 February 2022. The estimate within that document, which is copied at page 71 of the hearing bundle, is for ‘Phase 1’. I will return to that in a second, the fees’ estimate is described as being quote “up to £10,000”, unquote, that is plus VAT. And indeed, any disbursements, although no disbursements are anticipated necessarily in the mandate, and indeed as a matter of fact, disbursements are not an issue at this particular point. [3.] Phase 1 all relates to pre-issue costs. The phase is set out from page 69 of the mandate document in the bundle and it is broken down into three sub-phases referred to as a, b and c; a being entitled ‘Instructions document review and advice’, b ‘Letter before claim’ and c ‘Advice on responses and next steps.’ It is broadly common ground in this case that at the conclusion of the party’s retainer Phase 1a had been completed but b and c had not, for various reasons, been progressed to or attempted. … [9.] And it is common ground that during the relevant chronology which is, broadly speaking, between the end of November 2021 and the end of March 2022, the [appellant] provided various instructions to the [respondent]. And more particularly three sets or tranches of documents, 45 pages [page 267 of Appeal Bundle], sent initially on 27 November 2021. About 114 pages preferred (sic) on 13 February 2022 [page 309 of Appeal Bundle] and a further 63 pages of documents provided on 28 March 2022 [page 331 of Appeal Bundle]. Although Mr Goodwin [costs lawyer for the appellant] submits that those documents are either duplicative of what [was] originally provided or of provisional, peripheral relevance or interest. But I accept that in this case 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 (sic) twice much to the [appellant’s] disappointment. [10.] It is of relevance to my mind to note that at the crucial point of the chronology, which is between 28 and 29 March 2022 and specifically on the morning of 28 March 2022, the [respondent] contacted the [appellant] by email. This email set out in the bundle and it concerns the question of the cost estimate and more particularly the fees that had been incurred up to the morning of 28 March 2022. And what in essence the [appellant’s] solicitor pointed out was that there was an estimate of £10,000 for Phase 1, notwithstanding the fact that the parties were still engaged, although about to conclude Phase 1a. The [respondent’s] billing was already in excess of £5,000 plus VAT, described as being in terms of time work carried out well in excess of £5,000 plus VAT. Although there was a goodwill concession at that point to bill £4,500 plus VAT. [11.] In other words, the [appellant] was put on notice at that stage that in the context of this case and the manner in which instructions and information were being provided, the estimate was already, on the face of it, being exceeded, not in total terms but in terms of a reasonable interpretative breakdown in that more than 50 per cent of the total sum available had been spent before the conclusion of Phase 1a when there were also Phases b and c to be addressed. [12.] The [appellant] was clearly put on notice of that. On one interpretation of that email it is effectively an upwards revision of the estimate. But in any event, the [appellant] is put on notice of the fact of expenditure and nonetheless, instructed the [respondent] to continue with the work referable to Phase 1. And indeed provided, as I have noted that point, additional documentation relevant to that analysis. And it was thereafter that a fairly intensive period of work was undertaken culminating later that day in an advice which the [appellant] was unhappy about, that there was no arguable cause of action. And indeed further work thereafter undertaken in pursuance of that contested viewpoint.”

The judge made the following findings of fact:

[17]a. The Estimate was provided in the context of various assumptions and provisos depending upon the information and instructions provided by the appellant to the respondent (paragraph 8).b. The costs incurred by the respondent were reasonable and explicable in the context of the of “emerging relationship between the parties” (paragraph 13).c. The appellant was put on notice that the costs were prima facie over running. He was told what the consequences of that were and therefore were likely to be and raised no specific objection to that (paragraph 13; see also paragraphs 10 and 11).d. He could not find anything in the papers “to suggest either express or implied reliance, notwithstanding the comparatively low threshold of that requirement in this case” (paragraph 19). In particular, the appellant’s email to the respondent dated 29 March 2022 does not provide an illustration of reliance (paragraphs 16 to 19). The email of 29 March 2022 said this at the end: “So I find extraordinary that you don’t think that you van (sic) send a letter before action to SW and Eversheds after 4500 on the clock. To my is (sic) more than clear!”.e. The invoice was levied in July 2022 and it was from that point on that the appellant began to challenge the quantum of the fees claim (paragraph 19). (The invoice was in fact delivered in April 2022, and the claim form was issued in July 2022.)[18]The judge concluded by stating that, for all the reasons he had identified, he was not satisfied that the respondent’s recovery should be limited in any way to the costs estimate for Phase 1 set out in the mandate signed in February 2022, whether by reference to a notional figure for Phase 1a or an overall cap of £10,000 plus VAT. The Bill was therefore assessed as being reasonable and that is reflected in paragraph 1 of the order made on 29 August 2023.

The relevant law on an appeal

[19]The appeal court will allow an appeal where the decision of the lower court was –(a) wrong; or(b) unjust because of a serious procedural or other irregularity in the proceeds in the lower court: CPR Part 52.21. Further, an appellate court must not interfere with a trial judge’s findings of fact, unless it is compelled to do so. That applies not only to findings of primary fact but also to the evaluation of those facts, and the inferences to be drawn from them. An appellate court will interfere with findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified. This has been spelt out on a number of occasions in decisions of the House of Lords and Supreme Court (see, for example, Henderson v Foxworth Investments Ltd [2014] UKSC 41 at paras [58] to [67], per Lord Reed; and the summary of authorities in Fage UK Limited v Chobani UK Limited [2014] EWCA Civ 5 at paras [114] to [117], per Lewison LJ).[20]It is therefore plain that this is not a re-hearing. Mr Cohen for the appellant, nevertheless, spent a considerable amount of time in his oral submissions taking the court through the documents in the bundle which were all before the judge, and were the documents upon which he made his findings of fact.

Submissions on the appeal

[21]In his oral submissions Mr Cohen grouped the grounds of appeal as follows:a. Grounds 1, 2 and 3(ii): The judge’s interpretation of the contract between the appellant and the respondent was wrong as a matter of law.b. Ground 4 and 3(i): The judge’s approach to reliance on the estimate by the appellant was wrong as a matter of law and the judge’s finding of fact in relation to reliance was “not open to him”.c. Ground 5: This ground is a “catch-all” and Mr Cohen accepted in his submission that it added little to the points identified in the other grounds.[22]I take these issues in turn below.

The contract & steps taken by the respondent in relation to the Phase One estimate

[23]The respondent sent the appellant a proposed mandate; draft client engagement letter; terms of business & privacy statement; and a cyber security code by email on 10 December 2021. The appellant responded on 31 January 2022 to say that he was happy with the mandate, and asked for the final version for signature. That was duly sent to him on 9 February 2022 and he signed it that day.[24]The respondent’s engagement letter signed by the appellant, starts by explaining that “this engagement letter, together with the attached mandate and terms of business & privacy statement will describe the terms of engagement with you. These terms are collectively referred to as the Agreement. There is no dispute that they constitute the contract between the parties.[25]The engagement letter stated that “we will discuss fees with you at the outset of the matter and keep you up to date on fees as the matter progresses”. There was no dispute that the parties agreed that the respondent would work on the basis of hourly rates.[26]Page 3 of the engagement letter then explains in relation to hourly rates that:
“Where we agree with you that we shall undertake the specific activities … on the basis of Hourly Rates we will provide you with an estimate for the work as described in the Matter Detail. Estimates are determined by the hourly rates of the team engaged and are indicative of the level of fees that each stage typically attracts, based on our experience and allowing for the different level of fees and associated hours for each of the team who may be engaged on your matter. It is an estimate only and our fees may be more or less depending on your instructions, the urgency and complexity of the issues to be addressed and the actions of the other side and/or third parties. We shall endeavour to do the work as cost effectively as possible and will discuss any increase with you.”
[27]The signed mandate identified, under the heading, “Scope of Work and Fees” two phases of work, namely Phase One and Phase Two. Phase One comprised(a) instructions, document review and advice;(b) letter before claim; and(c) advice on response and next steps. Phase Two was the commencement of the proceedings. The time frame for Phase One was stated to be “approximately 7 days from the completion of our document review”, the fee type identified as “hourly rates” and the fees for Phase One identified to be “Up to £10,000”. Then, as to Phase Two, the respondent stated that they were unable to currently estimate for this. The fee-earners’ hourly rates were then specified, and information provided about disbursement and expenses.[28]Paragraph 8.3 of the standard terms of business is entitled “Costs Estimates” and provides:
“We aim to provide an initial estimate of Our Fees [charges to you for our services in this matter and any ensuing costs assessment (para. 8)] for dealing with the preliminary anticipated work on your matter or part of your matter. This initial estimate is included in the Matter Mandate [sets out the details of the applicable Fee Model for your matter and the scope of the services we will be providing (para 8.)] and is based on our understanding of your immediate instructions only. We shall always endeavour to notify you if this estimate is likely to be exceeded, before any resulting addition to Your Costs [all Fees, Disbursements, and Office Expenses (para 8.)] is incurred. Please note that a costs estimate does not set in any way an upper limit on Your Costs and is not intended to be binding. We will give you estimates of Our Fees as the matter progresses. Such estimates of Our Fees, unless expressly indicated, will not include Disbursements, Expenses or VAT… It is difficult to make estimates in very urgent matters where the level of Your Costs is, in part, dictated by the other side’s conduct, further instructions from you and unforeseen circumstances. Your Costs may vary from estimates given, for example, due to unexpected difficulties or if your requirements or the circumstances significantly change during the course of the matter. In such circumstances, we will keep you informed and will review the situation with you.”
[29]The relevant chronology between the end of November 2021 and 28 March 2022 is summarised at paragraph 9 of the judge’s judgment, which is set out above.[30]Then on 28 March 2022, which the judge described as “a crucial point in the chronology”, Steven Hudson of the respondent sent an email at 10:43 in the following terms to the appellant:
“Dear Manos We trust that you are well. Whilst we understand that matters are not quite as pressing as they had been, please do let us have the further information (and material where relevant) we have requested so that we can finalise your instructions and commence the drafting of a robust letter before claim to Wortley & Khan. We remain ready to commence that work. As we approach month-end, it feels like a good time to update you regarding our costs and to update the billing position. At the outset of the matter we anticipated that we would carry out our work in a phased manner. We identified two initial phases of work. We are currently carrying out work in relation to Phase One, in respect of which there were three distinct parts, namely (a) taking your instructions, reviewing material and advising you; (b) drafting a letter before claim; and (c) advising you on any response and next steps. We estimated that we might incur up to £10,000 + VAT for Phase One of our work. At the time of writing we await the provision of further information with a view to crystalising your instructions so that we might complete Phase 1(a). We have provided you with some limited advice already and we have carried out a detailed review of the tranches of material provided to us. In carrying out this work, we have incurred billable costs of £5,000 + VAT. Our recorded time is in fact much higher. We intend to raise an invoice this coming week for work carried out to date. We propose to raise that invoice in the sum of £4,500 + VAT. This includes a reduction to our fees as a gesture of good will. If you have any questions concerning the above or our work to date then please do not hesitate to contact us, otherwise we will be in touch in due course regarding our proposed invoice. We look forward to hearing from you and Bryn [in] due course.”
We look forward to hearing from you and Bryn [in] due course.”[31]At 12:36 on the same day, 28 March 2022, Bryn Robertson of Brecher LLP, who was authorised under the mandate to instruct the respondent on the appellant’s behalf, sent Alex Smallwood of the respondent a completed questionnaire (checked by the appellant), documents referred to in a note and a witness statement of Bryn Robertson. The email also told the respondent that the matter was now urgent as “the court has listed an urgent application for Friday this week and so we need, indeed counsel says we must have, the letter deployed by Thursday latest this week (!)”.[32]Then at 21:52 on 28 March 2022 Steven Hudson of the respondent emailed the appellant and Bryn Robertson telling them, amongst other things, that on the basis of the more detailed instructions and the information provided “it was more likely than not” that they would not be able to write the letter of claim in the “in terms that had previously been anticipated”. Eleven minutes later at 22:03 the appellant emailed Steven Hudson back saying that the email was not accurately “explaining the situation, or is what I expected from you. The letter before action should be sent ASAP.” Steven Hudson responded by email at 7:41 the next morning, 29 March 2022, referring to the information he had been provided with, and asking for a note of a call. The appellant responded with more information at 8:16 and concluded his email by saying “So I find extraordinary that you don’t think that you van (sic) send a letter before action to SW and Eversheds after 4500 on the clock. To my (sic) is more than clear!”.[33]On 6 April 2022 Steven Hudson of the respondent wrote to the appellant by email in order to “bring the billing position up to date” and attached the respondent’s invoice 23834 in the sum of £15,000 + VAT. The email then went on to explain how the “significant further costs” had been incurred.[34]The respondent replied later the same day to say that he would not be paying the respondent’s invoice and that they had “failed all over” as they “always said” he had a case and their email was “rather hypocritical”. The appellant sated that he was now in Palm Springs and in order to settle the matter he was prepared to pay the respondent “the generous sum” of £2,000, plus VAT.

The appellant’s submissions

[35]The appellant submits that under the terms of the retainer agreed with the respondent, the respondent was under a contractual duty to:a. notify the appellant if the estimate for Phase One was likely to be exceeded; andb. inform the appellant if the costs would vary from the estimate provided for Phase One.[36]The appellant maintains this obligation is twofold – to notify if there is a risk that the estimate was to be exceeded and to inform where it had been exceeded. The respondent did no such thing as, on the invoice time entries, the estimate (ie all £10,000 worth) had been superseded at the point at which the respondent sent its first email of advice late on 28 March 2022. The respondent failed to inform the appellant of this at the time and then went to incur a further £5,000 of costs over the next four days. In addition to that, the respondent’s email of 28 March 2022 timed at 10:43 was not, and could not be, “notice of an upward revision” of the estimate which the respondent had provided to the appellant.[37]The appellant accepts that the Estimate is not “a cap per se”, but maintains that the Estimate itself is very “inelastic” in the light of the submissions set out above.

The respondent’s submissions

[38]The respondent submits that the judge’s approach to the Estimate was correct. This was because he considered what he described as “the assumptions and provisos” that were provided alongside the Estimate, and he considered the Estimate in its proper context. Having done so, the judge was correct not to consider the words “up to” in respect of the estimated fees for Phase One in isolation.[39]On top of that the respondent submits that there was substantial additional work over that which was anticipated by the Estimate, which was necessitated by the “drip-feed” of instructions by the appellant, some of which the respondent maintains contradicted the appellant’s original instructions. The respondent points to the fact that judge did not reduce the total amount of the Bill and it is in that context that the appellant has advanced his case on the basis that, as a result of the contractual agreement between the parties in relation to the Estimate, it would be unreasonable to require the appellant to pay the full amount of the Bill.[40]Further, the respondent submits that the judge was right to find that, by an email dated 28 March 2022 (timed at 10:43) the respondent provided the appellant with an update about costs and they were “prima facie over running”. In addition to that, it was obvious to the appellant from that email that less than one-third of the work identified in Phase One had been completed and that work was not progressing in accordance with the estimate. Notwithstanding that update, the appellant provided the respondent with further instructions and required the respondent to undertake further work, namely send the letter before action as soon as possible (see email dated 28 March 2022 (timed at 22:03)).

Discussion & conclusion

[41]The appellant’s central points are that, under paragraph 8.3 of the Standard Terms of Business, the respondent was under a contractual obligation to notify the appellant before the Estimate was exceeded; the respondent should not have done any further work until such notification had been given; the respondent’s email of 28 March 2022 timed at 10:43 did not constitute the appropriate notification under the contract; the appellant is not, and cannot be liable, for any costs incurred after the Estimate had been exceeded.[42]The difficulty with this submission is that it is not, on any construction, what the contract between the parties says. The second paragraph of paragraph 8.3 of the Standard Terms of Business imposes the following obligation on the respondent, namely: “We shall always endeavour to notify you if this estimate is likely to be exceeded, before any resulting addition to Your Costs is incurred”.[43]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.[44]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. One can see that, in terms of managing client relationships, it could be said that such emails may be better sent at an earlier stage. However, that is not the point. The point is whether the respondent was contractually obliged to notify the appellant before costs were incurred which went beyond the estimate, failing which costs which exceeded the costs estimate were irrecoverable. 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. The appellant wanted the respondent to do the work and, in particular, he wanted the respondent, as a well-known name in the area of defamation law, to do the work.[45]The judge’s approach to the Estimate and the associated contractual obligations cannot be faulted, and there is no basis for this court on appeal to interfere with his findings of facts on these issues. Accordingly, these grounds of appeal, namely grounds 1, 2 and 3(ii), all fail. Reliance Relevant law: costs estimates and

Reliance

[46]Before turning to the parties’ submissions on this issue it is important to set out the law. The relevant legal principles applicable to the facts of this case were, in large measure, agreed between the parties. The are set out in the two well-known decisions of Mastercigars Direct Ltd v Withers LLP [2009] 1 WLR 881, [2007] EWHC 27733 (Ch), Morgan J (sitting with assessors; “Mastercigars 1”) and Mastercigars Direct Ltd v Withers LLP [2009] 3 Costs LR 393, Morgan J (sitting with assessors; “Mastercigars 2”) at [57] and [54].[47]Where a solicitor gives their client an estimate which is substantially exceeded, it will not follow that the solicitor will be held to the estimate. Rather, the estimate is a matter to be “taken into account” and a matter to which the court will “have regard to” when assessing reasonableness. An estimate of costs is a useful yardstick by which to judge the reasonableness of costs and “the greater the difference, the more it calls for an explanation.” However, if there is a satisfactory explanation for a difference between the estimate and the bill “the estimate may cease to be a useful yardstick”: see Mastercigars 1 at [92] and [99].[48]Then, between [100] and [102] of Mastercigars 1 Morgan J dealt with the issue of reliance:
“[100.] … What should the court do where the client does not, or is not able to, contend there is an estoppel but he is able nonetheless to satisfy the court that he took the estimate completely seriously and it is possible he might have approached the litigation differently if he had been given a figure nearer the final bill? [101.] On the question of reliance, [Leigh v Michelin Tyre plc [2004] 1 WLR 846] is authority for reliance being relevant on an assessment of costs between a paying party and a receiving party. Dyson LJ does not spell out in detail what the consequences of such reliance might be but he does not seem to have in mind only those cases where the paying party could show an estoppel. Conversely, something more than a belief that the costs are likely to equate to the estimate seems to be needed because Dyson LJ in para 31 refers to the question of “how” the paying party relied on the estimate … [102.] … In my judgment, the proper response to this decision [Wong v Vizards [1997] 2 Costs LR 46] is to hold that the court in that case was finding that, for the purposes of assessing reasonable remuneration payable to the solicitor, it is relevant as a matter of law to ask: “what in all the circumstances is it reasonable for the client to be expected to pay?”
Thus, even if the solicitor has spent a reasonable time on reasonable items of work and the charging rate is reasonable, the resulting figure may exceed what it is reasonable in all the circumstances to expect the client to pay and, to the extent that the figure does exceed what is reasonable to expect the client to pay, the excess is not recoverable.”[49]In Mastercigars 2 Morgan J had to consider the questions of how far reliance and detriment needed to be shown by a client in order for the court to apply a figure derived from the estimate as a figure to which it would be reasonable to hold the solicitor. He referred to the earlier decision of Mastercigars 1 at paragraphs [100] to [101] and said that his formulation of what is required “does not go so far as to require the client to prove on the balance of probabilities that he would have acted differently” and then held: “[47.] ... Accordingly, in my judgment, it is not necessary for the client to prove detriment in the sense of showing on the balance of probabilities that it would have acted in a different way, which would have turned out to be more advantageous to the client. In a case where the client satisfies the court that the inaccurate estimate deprived the client of an opportunity of acting differently, that is a relevant matter which can be assessed by the court when determining the regards which should be had to the estimate when assessing costs. Of course, if a client does prove the fact of detriment, and in particular substantial detriment, that will weigh more heavily with the court as compared with the case where the client contends that the inaccurate estimate deprived the client of an opportunity to act differently and where the matter is wholly speculative as to how the client might have acted.” (underlining added)[50]Morgan J then went on to explain in Mastercigars 2 the legal process involved in a case where a client contends that its reliance on an estimate should be taken into account in determining the figure which it is reasonable for the client to pay and explained the process as follows:
“[54.] … The court should determine whether the client did rely on the estimate. The court should determine how the client relied on the estimate. The court should try and determine the above without conducting an elaborate and detailed investigation. The court should decide whether the costs claimed should be reduced by reason of its findings as to reliance and, if so, in what way and by how much. Where there should be a reduction, and if so to what extent, is a matter of judgment.”
That, as set out below, was the approach the costs judge followed in relation to the facts of this case. The appellant nevertheless takes issue with the judge’s approach to the law and maintains that, on the facts of this case, the judge’s approach was flawed.

Appellant’s submissions

[51]The appellant submits that reliance is not a pre-requisite for an Estimate to bear on what is the reasonable figure to expect the appellant to pay for the services provided by the respondent and that the judge was wrong in this regard. This was a change in approach to the appellant’s position before the costs judge, where it was common ground between the parties that reliance, as set out in Mastercigars 1, was required.[52]In any event, the appellant submits that he plainly relied on the Estimate in the manner required by Mastercigars 1 as the Estimate was inaccurate and that deprived him of the opportunity of acing differently. The appellant points to the fact that he reviewed, and approved the Mandate, when he signed it on 9 February 2022 and, secondly, he took objection to the fees charged in his emails dated 29 March 2022 (timed at 08:16) and 6 April 2022 (timed at 15:44). The appellant submits that, on the facts of this case, the court cannot conclude that the appellant did not rely on the Estimate, as having read the Mandate and the Estimate, this is not a case where the court can conclude that the appellant would have entered into the retainer irrespective of the amount of the Estimate.

Respondent’s submissions

[53]The respondent submits that the judge’s approach to the question of reliance was correct as a matter of law and, in particular, in accordance with the principles established in Mastercigars 1 and 2.[54]The respondent submits that the judge’s conclusion that there was no express or implied reliance on the Estimate of £10,000 was an evaluative decision on the facts and, as such, there is no basis for the appellate court to interfere with that decision. The judge identified the correct legal test at paragraph 14 of the judgment and, on the evidence, this was a case where the appellant had determined that he would engage the respondent, specifically Steven Hudson, prior to making contact with them. The appellant had stated in correspondence some four weeks before approaching the respondent that he would be sending a letter before action, and this was repeated in his witness evidence filed at court on 25 March 2022. Those statements by the appellant were part of his strategy in the other litigation he was involved in, and he had committed himself to that course of action before he had received the Estimate from the respondent.[55]In addition, there was no evidence from the appellant to show that he had (as asserted in his points of dispute) conducted a risk/benefit analysis showing that, if he had known the costs were exceeding or would exceed the Estimate, he would have taken a different course with the respondent. However, even if there was any such evidence, it would not assist the appellant in this case as, once he was on notice that the costs were overrunning, he instructed the respondent to continue working on his behalf (see email dated 28 March 2022 at 22:03).

Discussion & conclusion

[56]The judge summarised the correct legal principles in his judgment and, in particular, stated that the paying party “must demonstrate some form of reliance upon the estimate to bind effectively the receiving party to its ceiling”. Indeed, it was common ground between the parties at the hearing that that was the correct approach based on the authorities, namely Mastercigars 1 and Mastercigars 2 (paragraph 14 of the judgment). The judge was required to determine whether the appellant relied on the estimate, and how he relied on the estimate and, in determining these questions, he was not required to carry out an elaborate or detailed investigation. The judge was therefore correct to consider whether there was any reliance on the part of the appellant, and the approach he took to determine this issue was correct as a matter of law.[57]The appellant also takes issue with the conclusion reached by the judge on the facts. The problem with that argument is that the judge’s decision that the appellant did not rely on the Estimate, is based on his findings of fact set out on paragraphs 14 to 19 of his judgment. These findings were all open to him on the documents which were placed before him, and there is no basis for an appellate court to interfere with these findings.[58]Further, this is a case where the judge determined the facts on the papers in the bundle before him. The appellant did not make an application for witness statements and, indeed, in a case such as this that was unlikely be appropriate or proportionate. In any event, on the documents before the judge, it is plain that the appellant instructed the respondent because he wanted to use a specific solicitor, and well-known firm, to pursue his allegations of defamation. This is not a case where the appellant could, on the evidence before the judge, have satisfied the court that he “took the estimate completely seriously and it is possible he might have approached the litigation differently if he had been given a figure nearer to the figure in the final bill” (cf Mastercigars 1 at [100], p910H). And, in any event, the judge was not satisfied of this, which was a decision which he was quite entitled to reach on the facts.[59]Accordingly, these grounds of appeal, namely grounds 3(i) and 4, also fail.

Ground 5

[60]I agree that ground 5 does not add anything to the appellant’s other grounds of appeal and therefore, for the reasons identified above, I do not need to say anything further about it in this judgment.[61]In any event, the judge took into account all the parties’ arguments and the evidence before him in relation to the Estimate. His conclusion that the respondent’s recovery should not be limited in any way to the Estimate, was correct for the reasons he gave.

Conclusion

[62]The appeal is dismissed.