Contentious and Non-contentious Business Agreements by Jim Knight
I still receive requests from solicitors to render advice and assistance in connection with problems encountered over contentious and non-contentious business agreements
The main difference between a solicitor relying on a contentious and a non-contentious business agreement is that he must obtain permission of the Court to enforce the former.
Where the clientâ€™s liability is disputed and the solicitor wishes to rely on a contentious business agreement he must apply for leave to enforce it. The agreement itself does not give a cause of action and if the need does arise to seek permission to rely on a contentious business agreement a Part 8 application should be made.
Under section 59 of the Solicitors Act 1974, a contentious business agreement must not give the solicitor any interest in the proceedings, i.e. it must not be champertous or on a contingency basis. It may however contain a conditional fee agreement stipulating for payment only in the event of success (with or without a success fee uplift) provided it complies with the existing rules and regulations relating to conditional fee agreements of which we all by now are well aware.
The effect of a contentious business agreement is to preclude a Solicitors Act assessment of the costs between solicitor and client except in respect of agreements by reference to hourly rates when the same provisions apply as for non-contentious business agreements.
Section 57 of the Solicitors Act 1974 provides that if the solicitor relies on a non-contentious business agreement and the client objects to it as being unfair and unreasonable, a Costs Officer may inquire into the facts and certify them to the Court. If from that certificate it appears to the Court that the agreement should be set aside, or the amount payable under it should be reduced, the Court may order so. The Court may also give consequential directions such as directing that an itemised Bill be delivered and assessed.
Although the Court requires only prima facie evidence of unfairness or unreasonableness in order to intervene, from a practical point of view the agreement of the client is the strongest evidence that the fee is reasonable.
To read the rest of Jim's useful guide including a section on contentious and non contentious costs just click here.