A High Court judge warned solicitors of the need to be clear in retainer letters, as he ruled that a firm had breached its contract by refusing to carry out further work for a client until he had paid his bills, in a decision that the judge admitted ‘may seem harsh’.

Mr Justice Cranston dismissed an appeal brought by north London firm Cawdery Kaye Fireman & Taylor (CKFT), against a costs judge’s ruling that no fees were payable by their former client Gary Minkin after the firm refused to carry out more work until he had paid his bill.

Minkin had instructed the firm to represent him in relation to an occupation and non-molestation order obtained without notice by his wife, from whom he had separated. CKFT gave Minkin a cost estimate of £3,000 plus VAT, and he paid £2,000 on account.

The firm then sent the client a retainer headed ‘Non-Molestation and Occupation Order’, with no other indication of what it was undertaking to do, and stating that its overall costs and expenses would be £3,500, plus VAT.

The retainer also said the firm would update Minkin in writing if it appeared that the cost estimate may be exceeded. After the first hearing, the firm sent Minkin a bill for £5,462.50.

When he questioned it, CKFT said the increase was largely a result of extra work, because his wife had unexpectedly rented out the matrimonial home.

Minkin said he could not pay the fees until he had a costs order against his wife. After further correspondence, the firm said it could not continue to act because of the outstanding payments.

Minkin ceased to instruct the firm and represented himself at the subsequent hearing, after which he applied for a detailed assessment of the bills.

The costs judge held that the firm’s refusal to continue to act without payment was a repudiatory breach of contract. He said the firm was not entitled to any costs, and had to refund all the fees that Minkin had paid so far, except for counsel’s fees.

Dismissing the firm’s appeal, Cranston said: ‘The outcome may seem harsh. But the fact is that it should have been made clearer in [the] retainer letter as to the nature of the engagement.’

He said the firm should have complied with the terms in its retainer letter and standard terms of business, and informed the client in writing that the costs estimate may be exceeded.

CKFT partner Daniel Fireman said the firm had lodged an appeal. He added: ‘The judgments to date are extraordinary and will, if allowed to stand, be seriously detrimental to the profession.

‘It must be the case that solicitors are, and should be, entitled to suspend services to clients who, without objectively reasonable justification, refuse to pay bills and payments on account which are contractually due and payable.’

Richard Clarke, a partner at south-east firm Routh Clarke who represented Minkin, said: ‘While the decision turned on the facts of the case, it is a timely reminder that solicitors must ensure any termination of representation is done within the rules.

‘Although the decision may seem harsh, lawyers write the contract, are trained in the law and have to accept the consequences if they get it wrong.’