Part 18 Cannot Be Used in a Solicitor-and-Own-Client Assessment to Investigate ATE Commissions: Certification Under s.70(7) Is Limited to Payments/Set-Off Relevant to the Assessed Bill

1. Introduction

The claimant (a former client) brought Part 8 SOCA proceedings under CPR 67.3 for assessment of his former solicitors’ statutory bill under Solicitors Act 1974 s.70. The solicitors had arranged after-the-event (“ATE”) insurance and deducted the ATE premium from the client’s damages via the client account/cash account mechanism. The client’s new representatives suspected (without evidence) that the solicitors might have received an undisclosed commission/introduction fee from the ATE insurer (or an intermediary), and attempted to compel answers by serving a CPR Part 18 Request for Further Information within the SOCA proceedings.

Costs Judge Rowley refused to order replies; Sweeting J allowed the client’s appeal and ordered the Part 18 Request to be answered. On second appeal, the Court of Appeal allowed the solicitors’ appeal and held there was no power to order such Part 18 replies because the information sought did not relate to a “matter in dispute in the proceedings”.

2. Summary of the judgment

• No “matter in dispute”: A dispute about whether the solicitors received secret commissions on the ATE premium is not a matter in dispute in SOCA proceedings, which are directed to assessing the bill (and the costs of assessment), not to taking a general account or determining fiduciary disgorgement claims.
• Meaning of “determine the result of the cash account”: PD 46 para 6.19 does not require (or permit) a merits review of cash account items unrelated to payment of the assessed bill. The certification step under s.70(7) is essentially arithmetical: it accounts for payments on account and set-off/retention of monies properly applicable to the bill.
• Part 18 cannot be used as disclosure by the back door: Even accepting Part 18 has no heightened “threshold” beyond relevance to a matter in dispute, it cannot be used to fish for information to found separate claims, or to circumvent disclosure rules.
• Edwards/Raubenheimer rejected: The Court held that Edwards and others v Slater and Gordon UK Ltd (Raubenheimer) wrongly expanded costs-judge jurisdiction and was decided per incuriam in light of Jones v James (1839) 1 Beav 307 and Cooper v Ewart (1847) 2 Ph 362; 41 ER 983.
• Procedural defects reinforced refusal: In any event, the Costs Judge had been asked to order replies without the Request being before him, contrary to PD 18 para 5.2, and without a proper application.
• Policy “gap” noted: The Court acknowledged the practical unfairness where evidence of commissions lies with solicitors but the sums are small, making standalone account proceedings disproportionate; however, any solution is for rule-makers or Parliament, not judicial innovation within SOCA.

3. Analysis

3.1 Statutory and procedural framework: what SOCA is (and is not)

• Solicitors Act 1974 s.70: focuses on assessing the proper amount of costs in the bill; s.70(7) requires certification of what is due “in respect of the bill” and the assessment costs.
• CPR 67.3 and CPR 46.10; PD 46 paras 6.6–6.19: provide a summary, self-contained assessment procedure. The cash account is required as part of the breakdown (PD 46 para 6.6(b)), and after the assessment hearing the court “determine[s] the result of the cash account” (PD 46 para 6.19).
• CPR 18.1: permits orders to clarify “any matter which is in dispute in the proceedings” or give additional information “in relation to any such matter” (emphasis central).

The Court of Appeal’s central move is definitional: identify the boundaries of “the proceedings” (a SOCA of the bill) and the consequent limits of what can be “in dispute” for Part 18 purposes. Anything not required to decide the assessment/certification under s.70 is outside the permissible scope.

3.2 Precedents cited and how they shaped the decision

(a) ATE premiums are not part of the solicitor’s bill: Herbert v HH Law Ltd [2019] EWCA Civ 527; [2019] 1 WLR 4253

The Court relied on Herbert to reinforce that an ATE premium (although often paid via solicitors) is not a solicitor’s disbursement that can be included in the bill and challenged through s.70 assessment. That context matters: if the premium itself cannot be assessed within SOCA, attempts to litigate commission-related consequences by “re-labelling” the issue as a cash account dispute are inconsistent with Herbert’s structure.

(b) Secret commission disclosure duty acknowledged but not determinative: Tankard v John Fredericks Plastics Ltd [2008] EWCA Civ 1375; [2009] 1 WLR 1731

The Court treated the professional duty to disclose commissions (and the relevant SRA financial services rules) as common ground. However, it separated: (i) the existence of fiduciary and regulatory duties, from (ii) the procedural vehicle by which a client may compel answers and obtain remedies. The duty did not enlarge SOCA jurisdiction.

(c) Consumer protection focus of s.70: Menzies v Oakwood Solicitors Ltd [2024] UKSC 14; [2024] I WLR 4245

The Court used Menzies to anchor the purpose of s.70: consumer protection against overcharging in the bill by assessing whether costs were “reasonably incurred” and “reasonable in amount”. This supported confining SOCA disputes to the specifics of the bill (and payment/credit issues directly bearing on what remains due on that bill).

(d) Part 18 is not for fishing for new claims: Trader Publishing Ltd v Autotrader.com Inc [2010] EWHC 142 (Ch) and Al Saud v Gibbs [2022] EWHC 706 (Comm); [2022] 1 WLR 3082

Trader Publishing was cited for the proposition that Part 18 cannot be used to elicit information to found separate claims. Al Saud was cited to emphasise that the Part 18 threshold (“matter in dispute”) must be crossed and cannot be bypassed by using Part 18 as an indirect disclosure tool.

(e) Secret profits/fiduciary remedies are outside SOCA: Lisa Jones v Richard Slade and Company Ltd [2022] EWHC 1968 (QB)

The Court treated Jones v Slade as confirming that equitable remedies for fiduciary breach (such as disgorgement/account of profits) cannot be folded into a s.70 costs assessment. That undermined the client’s attempt to make commission questions “relevant” by asserting a “dispute” over the cash account.

(f) The decisive “older” authorities restricting the post-taxation inquiry: Jones v James (1839) 1 Beav 307 and Cooper v Ewart (1847) 2 Ph 362; 41 ER 983

These cases supplied the doctrinal boundary for what can be considered when deciding what remains payable after assessment. They establish that the taxing officer (now costs judge) may take into account monies received/held by the solicitor that are properly applicable to paying the bill (by agreement or legal entitlement), but:

“no authority to take an account of pecuniary matters between the parties which are quite foreign to the bills of costs” (Jones v James)

The Court used these authorities to conclude that bringing commission/account-of-profits issues into SOCA via cash account disputes is impermissible, and that Edwards (Raubenheimer) had overlooked binding constraints (hence “per incuriam”).

(g) Burden and presumptions about the cash account: Re Lee, ex parte Neville (1868) LR 4 Ch App 43

The Court relied on Re Lee to reject the High Court’s suggestion that it is “incumbent” on the solicitor to satisfy the court of the cash account’s accuracy in the sense of disproving speculative doubts. The cash account is presumed accurate absent a good reason; if the client alleges an omitted payment on account, the client must prove it.

(h) Treatment of Edwards and others v Slater and Gordon UK Ltd [2022] EWHC 1091 (QB); [2022] Costs LR 861 (Raubenheimer)

The Court analysed Ritchie J’s pragmatic approach (driven by proportionality and access-to-justice concerns) but held it impermissibly expanded SOCA into a forum for investigating and managing disputes about ATE commissions, including by contemplating further case management hearings not provided for in the SOCA scheme. The Court expressly held Raubenheimer “wrongly decided” and per incuriam.

(i) Other contextual citations

• Belsner v CAM Legal Services Ltd [2022] EWCA Civ 1387; [2023] 1 WLR 1043 and Burstein v Times Newspapers Ltd [2002] EWCA Civ 1739; [2003] 1 Costs LR 111: used to situate the decision in a broader policy concern about disproportionate “satellite” costs litigation.
• Bendriss v Nicholson Jones Suttons Solicitors [2024] EWHC 1100 (SCCO) and Brown v JMW Solicitors LLP [2022] EWHC 2848 (SCCO): referenced as part of the SCCO’s experience of “commission” requests and the practice of labelling the cash account “in dispute” to interrogate ATE arrangements.
• Yasuda Fire & Marine Insurance Co of Europe Ltd v Orion Marine Insurance Underwriting Agency Ltd [1995] QB 174: invoked for an agent’s duty to provide information about transactions, but held not to answer the key jurisdictional/procedural question: even if a fiduciary should provide information, SOCA/Part 18 is not the correct compulsory mechanism.
• Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5; [2014] FSR 29: cited on the appellate court’s ability (and duty) to consider jurisdiction points.

3.3 Legal reasoning: why Part 18 could not be used here

1. Define the scope of the proceedings: A SOCA is “focused on the proper amount to be charged” in the bill, not a general accounting (reinforced by Menzies).
2. Constrain “cash account” relevance: The cash account’s role is to enable certification of the balance due on the assessed bill by accounting for: (a) payments on account, and (b) monies held/received that are properly applicable by appropriation or entitlement to retain pending payment. It does not open a merits inquiry into all debits/credits or potential omissions.
3. Apply CPR 18.1 strictly: Unless the information is about a matter the court must determine in these proceedings, it is not a “matter in dispute”. Commission questions were aimed at potential fiduciary/FSMA remedies—matters “foreign to the bills of costs”.
4. Reject “manufactured disputes”: A dispute is not created merely by stating dissatisfaction with the cash account absent articulated inaccuracy relevant to certification. Hypothetical possibilities (e.g., “there might have been a secret commission”) do not convert an extraneous topic into a SOCA issue.
5. Procedural discipline matters: PD 18 para 5.2 requires the text of the proposed order/requests to be before the court. Here, the Costs Judge was asked to order replies to a Request not in evidence, without a formal application—independently justifying refusal.

3.4 Practical and doctrinal impact

• Closes an attempted procedural “shortcut”: The decision prevents SOCA from being used as a low-cost gateway to investigate ATE commissions or to stage-manage separate claims.
• Clarifies certification under s.70(7): The decision strongly frames certification as arithmetical (subject to limited disputes about payments/appropriation relevant to the bill), reducing the risk of SOCA hearings being delayed by collateral disputes.
• Reorients reliance away from Edwards/Raubenheimer: The Court’s conclusion that Raubenheimer was per incuriam is likely to be treated as settling the point, prompting SCCO/costs judges to refuse similar Part 18 applications for commission enquiries.
• Regulatory/ombudsman route emphasised: Clients who want answers about commissions may be pushed toward complaints mechanisms (Legal Ombudsman, SRA) or separate equitable/account proceedings.
• Signals a rule-making problem: The Court acknowledged the access-to-justice difficulty where commission sums are small but information asymmetry is high; reform may follow via CPR/PD changes or statute.

4. Complex concepts simplified

• SOCA (Solicitor and Own Client Assessment): a statutory/court-supervised process to assess whether the solicitor’s billed costs are reasonable, producing a binding certificate of what is payable on the bill.
• Cash account: a ledger-style record of money received/paid by the solicitor for the client. In SOCA it is used mainly to calculate whether anything remains to be paid (or refunded) after the bill is assessed.
• ATE insurance premium: the price of insurance taken out to cover adverse costs risk. It is paid under the insurance contract (client–insurer) and, per Herbert, is not part of the solicitor’s bill for SOCA assessment.
• Secret commission / secret profit: a payment to a fiduciary (e.g., solicitor) connected with a client transaction that the client was not told about. The typical remedy is an account/disgorgement, which is not a costs-assessment remedy.
• CPR Part 18: a tool to clarify existing issues in the case. It is not meant to be used to find out whether you might have another claim.
• Per incuriam: a decision reached without considering a binding authority (often older case law), making the later decision vulnerable to being treated as wrongly decided.

5. Conclusion

Turner v Coupland Cavendish Ltd reasserts the limited, bill-focused nature of Solicitors Act 1974 s.70 assessment proceedings. It draws a firm jurisdictional line: the cash account’s function in SOCA is to support the final arithmetic of certification—payments on account and properly applicable set-off—not to provide a platform to investigate ATE commissions or to litigate fiduciary/account-of-profits claims. While the Court acknowledged the practical unfairness created by information asymmetry and low-value commissions, it held that any remedy lies in separate proceedings or regulatory/ombudsman routes, and that procedural reform is for rule-makers rather than judicial expansion of SOCA.