A BUSINESSMAN involved in a family law case has had a legal bill of €115,000 cut to €40,000.
Taxing master James Flynn ruled that O’Gorman Solicitors of O’Connell Street, Limerick, had not given the businessman an estimate of his legal costs before the divorce action began.
Section 68 of the 1994 Solicitors (Amendment) Act requires solicitors to give clients a written estimate of legal costs at an early stage.
According to the taxing master, O’Gorman Solicitors advised the client by email in March 2006 that his wife was seeking a divorce, “which is the most expensive type of legal proceedings”, and he should be “budgeting for in or around €30,000”. This email was sent 18 months after the solicitors first took instructions from the client.
The email said the client’s solicitors believed that the wife’s solicitors were “going to get a percentage of whatever [she] expects to get”. “They are going to try everything to squeeze money out of us,” said the solicitor.
In an email in May 2008, O’Gorman’s wrote: “No stone has been left unturned on the part of your wife’s solicitors with a view to maximising the costs.”
But the client’s costs were mounting. O’Gorman’s sent an email in September 2008 saying that the senior counsel involved was “looking for €5,000 to do a motion, on top of the brief fee, and I refused on your behalf to discharge it”, O’Gorman’s had already agreed to pay the senior counsel a brief fee of €20,000, which included the first day in court.
“Counsel are entitled to a refresher fee which was formerly two-thirds of the brief fee, but I understand it is now more like one quarter,” said O’Gorman’s.
The email said that junior counsel were entitled to charge two-thirds of the senior’s rate.
The solicitor warned the businessman that, in a similar case which lasted for six days in the High Court, the solicitor’s fee was €145,000.
“I know you were there when an estimate was given to the judge in the total amount of approximately €275,000 on your side,” O’Gorman’s told the client. “On (your wife’s) side, her estimate came to approximately €325,000,” a total potential legal bill of €600,000.
In February 2009, the solicitor sent the client a cost accountant’s opinion recalculating the firm’s fees at €115,000.
The client wrote to O’Gorman’s saying he would no longer require the firm’s services because of the “radical costs that have been incurred over the course of this case”, and the fact that the firm had “seriously misled” him about fees.
“Your costs have changed dramatically,” said the client, “and I simply cannot justify these expenses, no matter how I look at them.”
Flynn – who has since retired – said in his decision that solicitors had “an onerous duty” to ensure that clients had a clear understanding of their case. “Had the client been advised at the outset – or as soon as practicable thereafter – that the professional fee was going to be €1l5,000, he could have chosen to seek legal advice elsewhere,” said the taxing master.
“A modest excess [above the estimate] does not call for much explanation. A substantial excess calls for a great deal of explanation.”
Flynn said the estimate emailed to the client “was inadequate, and grossly undervalued the case from a monetary perspective”. He said the client had relied on the estimate based on the solicitor’s experience, so “should not have to pay a sum greatly in excess of that estimate, but he should have to pay a sum modestly in excess of the said estimate”.
The taxing master believed that €10,000 more than the estimate was “appropriate”, and he allowed O’Gorman Solicitors an instruction fee of €40,000.
A spokeswoman for the Bar Council said the practice of junior counsel charging two thirds of senior counsel’s fee had been abolished by the Bar in 2007. The practice of charging a fee as a percentage of a client’s damages was made illegal by the 1994 Solicitors (Amendment) Act.
Kieron Wood is a Barrister-at-LAW and Senior Assistant Editor at the Sunday Business Post.
* A Taxing Master provides an independent and impartial process of assessment of legal costs which endeavours to achieve a balance between the costs involved and the services rendered.
