Non-Contentious Business Remuneration: Challenging Solicitor Charges Under the 2009 Order — Perrett v Wolferstans
Detailed Assessment — 2026-01-14
Senior Costs Judge Rowley assessed a CFA solicitor's bill at £3,864 profit costs (reduced from £4,800 claimed), holding that fixed recoverable costs of £900 recovered from the opponent do not cap what a solicitor may fairly charge their own client under the S(NCB)RO 2009. The judgment establishes that item-by-item assessment of time and rates should precede a holistic 'step back' under the Article 3 factors, and a 25% CFA damages cap can satisfy client disclosure obligations about cost shortfalls.
Overview
Date: 14 January 2026
Judge: Senior Costs Judge Rowley
Nature of Proceedings: Solicitor and client assessment under the Solicitors Act 1974; non-contentious business remuneration
Key Issues:
- The correct methodology for assessing solicitor-client costs where hourly rates form the basis of the retainer
- Whether fixed recoverable costs can serve as a benchmark for fair and reasonable remuneration under the Solicitors (Non-Contentious Business) Remuneration Order 2009
- The extent of a solicitor's duty to inform a CFA client about the shortfall between incurred costs and inter-party recovery
- Application of the Article 3 factors under the S(NCB)RO 2009
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The Facts
Mr Ryan Perrett challenged the costs charged by his former solicitors, Wolferstans LLP, in respect of a personal injury claim conducted under a conditional fee agreement. The statutory bill dated 13 April 2022 claimed £4,800 in profit costs (including VAT), together with a success fee of £1,775.85. Wolferstans had recovered only £900 in fixed recoverable costs from the opponent, leaving a substantial shortfall to be borne by the client.
Senior Costs Judge Rowley had previously delivered a reserved judgment on 17 January 2025 dealing with preliminary issues. On 21 May 2025, the judge turned to the remaining "line by line" assessment of the individual cost items. The profit costs were ultimately assessed at approximately £3,864 -- a reduction of around £936 from the amount claimed. The success fee of £1,775.85 was allowed as claimed.
The central tension in the case was the gap between what Mr Perrett's solicitors had charged him and what they had recovered from his opponent. Mr Perrett argued that fixed recoverable costs should effectively set a ceiling on what was fair and reasonable for the solicitor to charge the client. He also contended that the solicitors had failed to adequately inform him about the potential shortfall.
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Assessment Methodology: Hourly Rates and the "Step Back" Approach
Senior Costs Judge Rowley established the correct methodology for assessing costs under the Solicitors (Non-Contentious Business) Remuneration Order 2009 (the S(NCB)RO). Where hourly rates form the basis of the retainer agreement, challenges to time spent and rates should be considered first on an item-by-item basis. The court should then "step back" to determine whether the resulting figure is fair and reasonable under the Article 3 factors.
The Article 3 factors include: the complexity of the matter, the skill and specialised knowledge involved, the time spent, the number and importance of documents, the circumstances of the transaction, the value of any property or money involved, the importance of the matter to the client, and whether the client has approved the costs.
The judge stated:
> "where...there are no other specific factors said to dwarf the time spent, I consider that I should assess the costs by reference to that time spent."
In other words, absent extraordinary factors, the court's primary focus remains on whether the time spent and rates charged were reasonable. The court's role is to arrive at "a right figure: one which is reasonable in all the circumstances and which is fair both to the client and to the solicitor."
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Fixed Recoverable Costs as a Benchmark
Mr Perrett's most significant argument drew on Nizami v Butt [2006] EWHC 159 (QB), contending that the fixed recoverable costs of £900 should serve as a baseline for assessing what was fair and reasonable. Simon J's principle in Nizami held that fixed cost schemes operate on a "swings and roundabouts" basis -- they are designed to be fair across the run of cases, even if individual cases may result in under- or over-recovery.
Senior Costs Judge Rowley rejected this analogy. He drew a clear distinction between inter-party costs recovery and the solicitor-client relationship:
> "The question of what is usual or unusual as between solicitor and client is a very different from the question of what is recoverable inter partes."
The "swings and roundabouts" principle concerns the fairness of an agreed scheme of recovery between opposing parties. It says nothing about what a solicitor may properly charge their own client. The fixed cost regime governs what the losing party must pay the winning party -- it does not dictate the terms of the contractual relationship between solicitor and client.
This reasoning follows SGI Legal LLP v Karatysz [2021] EWHC 1608 (QB), which confirmed that costs as between solicitor and client are fundamentally distinct from inter-party recovery.
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Client Disclosure and the 25% Cap
Mr Perrett also argued, relying on St James v Wilkin Chapman [2024] EWHC 1716 (KB), that there was a "golden rule" requiring solicitors to inform clients about irrecoverable costs. The argument was that Wolferstans should have clearly explained the potential shortfall between the costs incurred and the amount recoverable from the opponent.
The judge considered the CFA terms, which included a cap limiting the client's liability to a maximum 25% deduction from damages. He found that:
> "confirmation of the maximum liability is the crucial element to this."
Following Swann v Slater & Gordon LLP (unreported, 25 January 2021), the judge accepted that the 25% cap constituted sufficient client notification. Mr Perrett had signed the retainer agreement and understood the deduction provision when confirming settlement.
The judge also distinguished Belsner v Cam Legal Services [2022] EWCA Civ 1387, where the Court of Appeal considered an invoice that made clear the solicitors only sought to recover the amount received from the client. That case "gave some context as to where the court should step in" regarding disclosure obligations, but it did not prevent a solicitor from recovering costs exceeding the fixed costs regime, provided the client was properly informed.
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Key Takeaways
For Solicitors
1. Fixed recoverable costs do not cap your charges -- The amount recovered inter-party under the fixed costs regime is irrelevant to what you may fairly charge your own client. These are separate legal relationships governed by different principles.
2. The 25% CFA cap can satisfy disclosure obligations -- Where a CFA includes a clear cap on the client's liability, this may constitute sufficient information about the potential shortfall between incurred and recoverable costs. But the cap must be clearly communicated and understood.
3. Item-by-item assessment remains the starting point -- Under the S(NCB)RO 2009, the court will first scrutinise time and rates before stepping back to consider the Article 3 factors. Ensure your time recording is accurate and your rates are defensible.
For Clients
1. Understand your CFA terms -- The 25% cap on deductions from damages is a contractual protection, but it also limits your ability to challenge costs after the event. If you sign a retainer with a clear cap, the court may find you were adequately informed.
2. Inter-party recovery is not a ceiling -- The fact that your solicitor recovered only a fraction of their costs from the opponent does not mean the balance is unfair. The court assesses solicitor-client costs on their own terms.
3. Challenge rates and time, not the principle -- The most productive challenges focus on whether the time spent was necessary and the rates were reasonable, rather than arguing that fixed costs should limit your solicitor's charges.
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Conclusion
Perrett v Wolferstans reinforces the fundamental distinction between inter-party costs recovery and the solicitor-client relationship. Practitioners acting under CFAs in fixed costs cases should take note: the fixed recoverable costs regime operates in a different sphere from the solicitor's entitlement to charge their own client. The Nizami "swings and roundabouts" principle, designed to ensure fairness in the fixed costs scheme as a whole, cannot be imported into a solicitor-client assessment.
The decision also provides useful guidance on the extent of client disclosure obligations in CFA cases. While solicitors must inform clients about potential shortfalls, a clearly communicated percentage cap on deductions from damages can satisfy this duty. This pragmatic approach reflects the reality of volume personal injury work, where detailed cost projections at the outset of a case may be neither practical nor meaningful.
For costs practitioners, the judgment confirms that the S(NCB)RO assessment methodology -- item-by-item scrutiny followed by a holistic "step back" -- remains the correct approach, with the Article 3 factors providing the framework for that broader evaluation.
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Citation: Perrett v Wolferstans LLP [2026] EWHC 50 (SCCO)
Full judgment available at: BAILII
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