A claim barred by limitation allowed on a response letter by the client

by duncan12 on January 4, 2013

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The Court of Appeal has ruled that a solicitor’s claim for costs which are billed but not fixed by agreement or assessment was covered by section 29(5) of the Limitation Act 1980. It was the first time that the appeal court had ruled on the subject said Lord Justice Lloyd.

Bath Housing Co-operative which needed to take the possession of a flat from one of its tenants and instructed a law firm to act for it the court was told.

The job was done by the end of 2003 Lloyd LJ said. The housing lawyer’s fees had not been agreed, so they were entitled to claim a reasonable amount for the work done.

It was for the lawyers of the firm to put forward their bill and the client was entitles to have it assessed by the court. If it was unpaid for six years and the limitation period for any such claim had to be made within six year period and in the instant case the solicitors had not done even after the limitation had ended.

But in the meantime they had written to the client in September 2004 to tell it that they owed the firm an amount payable by way of their costs. The client protested through a letter, dated 20 September 2004, against the amount that was claimed.

The Appeal Court delivered the judgment in Phillips & Co v Bath Housing Co-operative [2012] EWCA Civ 1591, and Lord Justice Lloyd said that when the firm did bring the proceedings in early September 2010, the client relied, among other defences, on the Limitation Act 1980.

But the firm argued that the client’s protest letter on the size of the bill was in itself an acknowledgement under section 29(5) of the Act, which had again started the cause of action and the limitation had started afresh from the date of the letter hence the claim for £52,000, was made in time 

Lloyd J concluded that a claim by solicitors for remuneration “even though not yet fixed by assessment or otherwise, was within the phrase ‘debt or other liquidated pecuniary claim’ in section 29(5)a”.

He added that looking at the letter, it did seem to  the letter was saying that the client did owe something to the firm in as much as it refers to the claim and takes issue, or indicates that issue will be taken with the amount claimed, but not with the principle that something was payable.

Viewed in that way, he said the trial judge was right to hold that the claim had been acknowledged.

Lord Justice Lloyd dismissed the housing co-operative’s appeal. Lord Justices McFarlane and Longmore agreed.

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