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Following Glaser v Atay, careful thought should be given to how direct access fees are expressed and payment terms are structured or a court may refuse to enforce them. Iqbal Mohammed distills the judgment into its three crucial points for hard-pressed barristers
The Court of Appeal has confirmed in Glaser v Atay [2024] EWCA Civ 1111 that clients contracting with barristers directly under direct access (formerly ‘public access’) are entering into consumer contracts. Therefore, such contracts should avoid unfair terms caught by the Consumer Rights Act 2015 (CRA 2015) or else a court will refuse to enforce them.
This article looks the practical implications for counsel operating under, or offering services through, direct access.
The conclusion of the Court of Appeal was:
‘this appeal confirms… that the contract was inadequate for the sort of case for which it was used. I do not mean to say that counsel can never stipulate for payment if a case goes off at a late stage... Nothing I have said is intended to prevent counsel from devising and agreeing with their clients contracts that fairly balance their own interests in not being left with gaps in their diaries with the interests of their clients in not paying for work that is not carried out.’
For hard-pressed barristers, the decision can be distilled into three crucial points:
Firstly, unlike referred work, direct access work requires barristers to think through and draft contracts which comply with CRA 2015. The claimants used wording very similar to the standard wording in the Bar Council’s template letter. While a good start, this is inadequate for big pieces of work where the fees are tens of thousands of pounds.
Barristers that undertake direct access work should draft their own model terms and not rely on the clerks (this case illustrates the point very well). Most importantly, careful thought must be given to how the fees are expressed and how the payment terms are structured. These two are particularly important, especially for large pieces of work such as multi-day hearings. The trial judge, High Court and Court of Appeal found the letters of engagement unsuited to the work contracted. The simplistic nature of the terms within were a large part of why they were held to be unfair.
Secondly, with respect to the fee, using a lump sum makes it harder to divide the fees incurred in cases where there is partial performance. It is likely far better to break down the fee, especially where the work has several components (e.g. preparation, conference, drafting skeleton argument, etc.). That way, a link can be made between the fee, the payment stage and the liability of the client.
Further, this has the benefit of explaining the fees to the client. While a court has no power to assess the ‘value’ of the fees for the work agreed, this case shows that explaining why the fee is what it is can be extremely helpful in determining the fairness of the amount incurred if the work is cancelled.
Practitioners should bear in mind that using a large, fixed fee but then falling back to quantum meruit in the alternative – asking the court to essentially order reasonable payment for the work actually done – is unlikely to succeed. Turner J (in the first appeal) specifically warned that such alternatives:
‘would have the potential to disincentivise traders from ensuring that the terms under which they contracted were fair. Otherwise, they could opt to incorporate unfair terms in the hope that they would not be challenged but confident that there would be a safety net providing for the payment of a reasonable sum in the event that they were.’
Thirdly, connected to the first two points, careful thought should be given to when the fees should be incurred. Most clients will have a 14-day cooling off period (this can be waived in certain circumstances). However, contracting the whole fee, especially a very large one, to be incurred immediately after (without provisions for refund) is unlikely to be fair. It would be far better to agree stages by which the fee is incurred, or a mechanism for a refund where the work is then unperformed. This balances to the interests of both the barrister and client. It also allows for the fee to reflect the loss of, or work performed by, the barrister.
By way of illustration, using the facts of this case, the fee may be expressed as: £90,000 comprising specific sums attributed to (1) reading-in and preliminary discussions; (2) conference and associated preparation; (3) drafting of chronology/initial preparation; (4) full preparation for hearing; (5) research and drafting skeleton. The payment terms can then reflect these components and be incurred in stages or when the work is due or performed. That way, should the barrister complete stage (3), the client is liable for all fees to that point but saves on the balance as that work was unperformed.
This spreads the risk of aborted hearings and balances the interests of both the barrister and the client, unlike the payment term in the case.
If barristers wish to incorporate a cancellation charge or a mechanism for charging for days lost which cannot be rebooked, or requiring the whole fee to be incurred very shortly before the hearing (which is both common and expressly permitted by the Court of Appeal) then specific terms can be considered for those cases. These terms should be transparent and prominent.
The judgment should be considered welcome guidance for the Bar which, after several years of direct access, has yet to take a serious look at the contracts and terms which govern its instructions by lay clients. The practices which dominate referred work cannot easily, or readily, be transposed to direct instructions from the client.
The facts of this case and the reasoning of the Court of Appeal (which upheld the both the trial judge and Turner J on the first appeal) are as follows.
The claimants, leading and junior counsel, were engaged under public access by Mrs Atay in financial remedy proceedings. The final hearing was listed for 10 days starting 21 September 2020.
On 7 July, the claimants’ clerks emailed Mrs Atay two letters of engagement. It’s fair to say that the courts, at all levels, did not think much of these contracts. The two letters were materially the same.
The terms in issue were (‘the Payment Term’):
‘The work you are instructing me to carry out is: Preparation of and representation at the PTR hearing on the 10 July 2020, and the 10 [sic] Final hearing commencing from the 21 September 2020, listed at the Central Family Court.
For the avoidance of doubt, the fee covers the above mentioned work and therefore if the hearing concludes early or is adjourned to another date or does not go ahead for any reason beyond our control, then the full fee is still payable and another fee will be payable for any adjourned hearing.’ [emphasis added]
The fees were provided as a fixed fee:
‘My fee for accepting the instruction to appear as an advocate on the occasions described above will be £90,000 plus VAT.’
The bulk of this was payable about three weeks before the hearing. Before that, on 26 August, a judge vacated the final hearing.
Mrs Atay then dispensed with the services of the claimants and refused to pay the fees. Crucially, her cancellation was before the barristers’ planned preparation, on 7 September.
The claimants sued for their unpaid fees and, alternatively, sued for ‘lesser but similar sums’ under quantum meruit. The claimants were unsuccessful at trial (except on quantum meruit, which was reversed) and on the first appeal. The Court of Appeal dismissed the second appeal.
After deciding that the term went to ‘the timing of payment and the consequences of the case not going ahead’, which was capable of assessment, it assessed whether the Payment Term was unfair.
The starting point was a list of terms likely to be unfair (‘the Grey List’), which included:
‘A term… requiring that, where the consumer decides not to conclude or perform the contract, the consumer must pay the trader a disproportionately high sum in compensation or for services which have not been supplied.’ [emphasis added]
Firstly, terms requiring payment of fees following the client’s cancellation of the work, do not themselves fall into the Grey List. The problem was that the Payment Term ‘gave no breakdown’ of how it was made up. An obvious problem was rolling up the refreshers into one fee:
‘56… Taking Mr Glaser’s fees as an example… 9 days’ refreshers would therefore have accounted for £40,500 of the total £90,000, and allowing the same for the first day of the trial would take the total to £45,000. That leaves the other £45,000 to cover the pre-trial review and the 10 days’ preparation… [leaving] £40,000 for the 10 days’ preparation and any other work, which is 80 hours at Mr Glaser’s rate of £500 per hour…
‘57. Using that as a reasonably reliable guide to the way in which the fees were made up, one can see that when counsel were disinstructed on 31 August, Mr Glaser had done the work for the pre-trial review… and spent about 15 to 20 hours thinking about the case. But he had not started on the 10 days’ preparation for the final hearing that he had allowed for, nor of course did he provide any representation at the hearing as it did not go ahead. Mrs Atay was nevertheless being asked to pay £85,000 for these services which she had not received. That seems to me plainly disproportionately high. ’ [emphasis added]
Therefore, it upheld the High Court’s decision that this was grey term. However, this did not mean it was automatically unfair, rather ‘a suggestion of unfairness’ hung over it.
Secondly, the court applied s 62(4) to assess the substance of the Payment Term – contrary to good faith, did it create a significant imbalance in the parties’ obligations to the detriment of the consumer?
On this, both appellate courts agreed with the trial judge who found that the Payment Term was unfair. Key to this was the determination that the term was an ‘all or nothing’ term, weighing 100% in favour of the barrister. In particular:
‘it skewed the potential advantage to be gained by the barristers under the contract so far away from the consumer’s interests, and so far in the barristers’ favour, that it did not satisfy the test of fairness… Mrs Atay would have been liable to Mr Glaser for the full fee of £108,000 despite him having done no work and in circumstances where his diary had only been blocked out for 15 days, some 2 months ahead…’
Turner J also noted that the term did not recognise the ability of the claimants to take alternative work, thus reducing the liability of the client.
Iqbal Mohammed is a member of St. Philips Chambers and practises property and commercial law. He is also direct access accredited.
The Court of Appeal has confirmed in Glaser v Atay [2024] EWCA Civ 1111 that clients contracting with barristers directly under direct access (formerly ‘public access’) are entering into consumer contracts. Therefore, such contracts should avoid unfair terms caught by the Consumer Rights Act 2015 (CRA 2015) or else a court will refuse to enforce them.
This article looks the practical implications for counsel operating under, or offering services through, direct access.
The conclusion of the Court of Appeal was:
‘this appeal confirms… that the contract was inadequate for the sort of case for which it was used. I do not mean to say that counsel can never stipulate for payment if a case goes off at a late stage... Nothing I have said is intended to prevent counsel from devising and agreeing with their clients contracts that fairly balance their own interests in not being left with gaps in their diaries with the interests of their clients in not paying for work that is not carried out.’
For hard-pressed barristers, the decision can be distilled into three crucial points:
Firstly, unlike referred work, direct access work requires barristers to think through and draft contracts which comply with CRA 2015. The claimants used wording very similar to the standard wording in the Bar Council’s template letter. While a good start, this is inadequate for big pieces of work where the fees are tens of thousands of pounds.
Barristers that undertake direct access work should draft their own model terms and not rely on the clerks (this case illustrates the point very well). Most importantly, careful thought must be given to how the fees are expressed and how the payment terms are structured. These two are particularly important, especially for large pieces of work such as multi-day hearings. The trial judge, High Court and Court of Appeal found the letters of engagement unsuited to the work contracted. The simplistic nature of the terms within were a large part of why they were held to be unfair.
Secondly, with respect to the fee, using a lump sum makes it harder to divide the fees incurred in cases where there is partial performance. It is likely far better to break down the fee, especially where the work has several components (e.g. preparation, conference, drafting skeleton argument, etc.). That way, a link can be made between the fee, the payment stage and the liability of the client.
Further, this has the benefit of explaining the fees to the client. While a court has no power to assess the ‘value’ of the fees for the work agreed, this case shows that explaining why the fee is what it is can be extremely helpful in determining the fairness of the amount incurred if the work is cancelled.
Practitioners should bear in mind that using a large, fixed fee but then falling back to quantum meruit in the alternative – asking the court to essentially order reasonable payment for the work actually done – is unlikely to succeed. Turner J (in the first appeal) specifically warned that such alternatives:
‘would have the potential to disincentivise traders from ensuring that the terms under which they contracted were fair. Otherwise, they could opt to incorporate unfair terms in the hope that they would not be challenged but confident that there would be a safety net providing for the payment of a reasonable sum in the event that they were.’
Thirdly, connected to the first two points, careful thought should be given to when the fees should be incurred. Most clients will have a 14-day cooling off period (this can be waived in certain circumstances). However, contracting the whole fee, especially a very large one, to be incurred immediately after (without provisions for refund) is unlikely to be fair. It would be far better to agree stages by which the fee is incurred, or a mechanism for a refund where the work is then unperformed. This balances to the interests of both the barrister and client. It also allows for the fee to reflect the loss of, or work performed by, the barrister.
By way of illustration, using the facts of this case, the fee may be expressed as: £90,000 comprising specific sums attributed to (1) reading-in and preliminary discussions; (2) conference and associated preparation; (3) drafting of chronology/initial preparation; (4) full preparation for hearing; (5) research and drafting skeleton. The payment terms can then reflect these components and be incurred in stages or when the work is due or performed. That way, should the barrister complete stage (3), the client is liable for all fees to that point but saves on the balance as that work was unperformed.
This spreads the risk of aborted hearings and balances the interests of both the barrister and the client, unlike the payment term in the case.
If barristers wish to incorporate a cancellation charge or a mechanism for charging for days lost which cannot be rebooked, or requiring the whole fee to be incurred very shortly before the hearing (which is both common and expressly permitted by the Court of Appeal) then specific terms can be considered for those cases. These terms should be transparent and prominent.
The judgment should be considered welcome guidance for the Bar which, after several years of direct access, has yet to take a serious look at the contracts and terms which govern its instructions by lay clients. The practices which dominate referred work cannot easily, or readily, be transposed to direct instructions from the client.
The facts of this case and the reasoning of the Court of Appeal (which upheld the both the trial judge and Turner J on the first appeal) are as follows.
The claimants, leading and junior counsel, were engaged under public access by Mrs Atay in financial remedy proceedings. The final hearing was listed for 10 days starting 21 September 2020.
On 7 July, the claimants’ clerks emailed Mrs Atay two letters of engagement. It’s fair to say that the courts, at all levels, did not think much of these contracts. The two letters were materially the same.
The terms in issue were (‘the Payment Term’):
‘The work you are instructing me to carry out is: Preparation of and representation at the PTR hearing on the 10 July 2020, and the 10 [sic] Final hearing commencing from the 21 September 2020, listed at the Central Family Court.
For the avoidance of doubt, the fee covers the above mentioned work and therefore if the hearing concludes early or is adjourned to another date or does not go ahead for any reason beyond our control, then the full fee is still payable and another fee will be payable for any adjourned hearing.’ [emphasis added]
The fees were provided as a fixed fee:
‘My fee for accepting the instruction to appear as an advocate on the occasions described above will be £90,000 plus VAT.’
The bulk of this was payable about three weeks before the hearing. Before that, on 26 August, a judge vacated the final hearing.
Mrs Atay then dispensed with the services of the claimants and refused to pay the fees. Crucially, her cancellation was before the barristers’ planned preparation, on 7 September.
The claimants sued for their unpaid fees and, alternatively, sued for ‘lesser but similar sums’ under quantum meruit. The claimants were unsuccessful at trial (except on quantum meruit, which was reversed) and on the first appeal. The Court of Appeal dismissed the second appeal.
After deciding that the term went to ‘the timing of payment and the consequences of the case not going ahead’, which was capable of assessment, it assessed whether the Payment Term was unfair.
The starting point was a list of terms likely to be unfair (‘the Grey List’), which included:
‘A term… requiring that, where the consumer decides not to conclude or perform the contract, the consumer must pay the trader a disproportionately high sum in compensation or for services which have not been supplied.’ [emphasis added]
Firstly, terms requiring payment of fees following the client’s cancellation of the work, do not themselves fall into the Grey List. The problem was that the Payment Term ‘gave no breakdown’ of how it was made up. An obvious problem was rolling up the refreshers into one fee:
‘56… Taking Mr Glaser’s fees as an example… 9 days’ refreshers would therefore have accounted for £40,500 of the total £90,000, and allowing the same for the first day of the trial would take the total to £45,000. That leaves the other £45,000 to cover the pre-trial review and the 10 days’ preparation… [leaving] £40,000 for the 10 days’ preparation and any other work, which is 80 hours at Mr Glaser’s rate of £500 per hour…
‘57. Using that as a reasonably reliable guide to the way in which the fees were made up, one can see that when counsel were disinstructed on 31 August, Mr Glaser had done the work for the pre-trial review… and spent about 15 to 20 hours thinking about the case. But he had not started on the 10 days’ preparation for the final hearing that he had allowed for, nor of course did he provide any representation at the hearing as it did not go ahead. Mrs Atay was nevertheless being asked to pay £85,000 for these services which she had not received. That seems to me plainly disproportionately high. ’ [emphasis added]
Therefore, it upheld the High Court’s decision that this was grey term. However, this did not mean it was automatically unfair, rather ‘a suggestion of unfairness’ hung over it.
Secondly, the court applied s 62(4) to assess the substance of the Payment Term – contrary to good faith, did it create a significant imbalance in the parties’ obligations to the detriment of the consumer?
On this, both appellate courts agreed with the trial judge who found that the Payment Term was unfair. Key to this was the determination that the term was an ‘all or nothing’ term, weighing 100% in favour of the barrister. In particular:
‘it skewed the potential advantage to be gained by the barristers under the contract so far away from the consumer’s interests, and so far in the barristers’ favour, that it did not satisfy the test of fairness… Mrs Atay would have been liable to Mr Glaser for the full fee of £108,000 despite him having done no work and in circumstances where his diary had only been blocked out for 15 days, some 2 months ahead…’
Turner J also noted that the term did not recognise the ability of the claimants to take alternative work, thus reducing the liability of the client.
Following Glaser v Atay, careful thought should be given to how direct access fees are expressed and payment terms are structured or a court may refuse to enforce them. Iqbal Mohammed distills the judgment into its three crucial points for hard-pressed barristers
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