HL Deb 10 March 1865 vol 177 cc1463-74

Order of the Day for the Second Reading read.

Moved, "That the Bill be now read 2ª"—(The Lord Chancellor.)

LORD ST. LEONARDS

said, that as the noble and learned Lord had moved the second reading of the measure without a word of comment, it would be necessary that he should himself explain its provisions in order that he might show why he objected to it. This mode of moving the second reading gave to his noble and learned Friend the reply upon him, instead of his having the advantage of replying to the speech in favour of the Bill. The Act might more properly have been entitled, "Attorneys and Solicitors Remuneration Bill." Now, in the measure which his noble and learned Friend introduced last Session, it was recited that the law as it stood with regard to the charges of attorneys was inexpedient and unjust—that was, he supposed, that they were not paid enough. Those words were omitted from the preamble of this Bill, and therefore he presumed that the noble and learned Lord now thought that the law was not unjust. The first clause of the Bill gave to every attorney the power of making a bargain with his client at any time as to the sum for which he would conduct a particular business; although that sum should be in direct violation of the regulations of the court fixing the amount of attorneys' fees in every particular instance. The second clause gave to an attorney interest on his bill of costs from the time of demand. The third provided that an attorney who was executor or administrator might act as attorney to the estate, and charge his fees as such; so that an attorney executor could originate proceedings and carry them on on his own authority, and at his own will, but at the expense of his client. And the last clause provided that an attorney or solicitor might take from his client security for future costs. Such a thing as that had never been permitted by the Courts of England, and ought not to be allowed; because if an attorney could obtain security for future costs he would be utterly reckless, and need not care in what litigation he involved his client. He would show their Lordships what had been the settled practice of the courts of law and equity as to the relation between attorneys and solicitors and their clients. Lord Hardwicke, in a case that was reported in 2 Atkins, page 27, said that since the passing of the Act for taxing attorneys' costs, 2 Geo. II. c. 23, solicitors had been considered as officers of justice, stated fees had been allowed to them, which they were not permitted to exceed, and in all the courts, more especially in courts of law, certain rules had been laid down to regulate their behaviour to their clients. Lord Loughborough and Lord Eldon had also laid it down as a well known principle of law that, under any circumstances, the charges of an attorney were taxable, and even in cases where he might have already obtained payment the court would interfere if there were any ground for suspecting the existence of any overcharge or fraud on his part. He quoted these authorities to show that the law had always regarded transactions between attorneys and their clients as resting upon a totally different foundation to that of ordinary transactions. Supposing, for instance, an attorney were to purchase his client's estate, it would scarcely be possible for him to maintain such purchase in equity, notwithstanding the value of the property were well ascertained; there must be a dealing at arm's length, as it is termed, and the client must have the advice of a second attorney. The whole system was well devised for protecting the client from the possible improper conduct of the attorney. It would be far from pleasant to him who had had friendly relations for so many years with attorneys to speak of them with disrespect as a class, and he distinctly disclaimed any such intention; still there were persons in that profession, as in others, who might endeavour to take advantage of any Bill giving them uncontrolled power over their clients. As the law now stood an attorney could make no bargain with his client for any given sum for his professional services. The law from the earliest period had provided for the taxation of the costs of attorneys, and the costs which they were entitled to charge had been most accurately determined. From the time of the 3rd of James I. down to the present day Bills have been introduced to regulate the costs of attorneys; but in every case they contained most stringent provisions as between the client and his attorney, and always subjected his charges to taxation. In 1843 the laws relating to this subject were consolidated and amended, by the 6 & 7 Vict. c. 73. One of the most material provisions of the Bill was contained in the 37th section, which enacted that no attorney or solicitor should be entitled to commence an action for the recovery of his costs until the expiration of one month after the delivery of his bill, or until it was duly taxed. The 5 & 6 Vict. c. 102 provided for the appointment of six taxing-masters, with a salary of £2,000 per annum each, and certain returns showed that the expenses of the taxing-masters' offices amounted to £16,000 or £17,000 per annum. The proposed Bill was intended to strike at the root of all these laws, and to render the office of the taxing-master utterly useless and nugatory. It overruled the general practice and practically repealed all former Acts of Parliament upon the subject, by rendering it lawful for every attorney and solicitor to enter into a contract with his client regulating the amount of his remuneration. There had recently occurred a rather extraordinary case showing what the effect was of a man making an agreement with his client for work to be done, and with which their Lordships were, no doubt, familiar. It was that of Mr. Kennedy, a barrister, who admittedly had carried the case of his client through a long litigation with great tact, judgment, and nerve to a successful issue. He thought that as a barrister he was entitled to make a bargain with his client, and accordingly he did make a bargain with her that he was to receive £20,000 for his services in the suit. The lady did what ladies sometimes would do—changed her mind, and refused to pay the money. Mr. Kennedy, thinking that law was on his side, went to every court in Westminster Hall; but all the courts decided as they ought to have decided—that he was not entitled to recover a single shilling; so that all his ability had been successfully employed for his client without any remuneration for himself. Was Parliament now to enable attorneys to do what barristers could not? do? Would their Lordships enable attorneys to do that which, from the nature of things, ought not to be done? Coming to another portion of his noble and learned Friend's measure, he had to observe that in the Bill of last year his noble and learned Friend proposed that if, of two trustees or executors, one, being an attorney, proposed to commence a suit, he would not be entitled to his fees as an attorney unless he had obtained the consent of the other trustee or executor to the suit being instituted; but under the Bill now before their Lordships an attorney in such a position was not required to obtain the consent of his co-trustee nor of his cestui que trust, so that his first act might be to institute a suit against himself, instructing himself and paying himself out of the assets. With regard to the second clause, be would remind their Lordships that the Act of 1860 empowered a Judge in equity to order interest to be paid at 4 per cent on taxed costs; and the same Act also enabled attorneys to acquire a charge upon property which they might recover or preserve by their exertions. He objected to the alterations which this Bill proposed; in his opinion, these clauses would, if agreed to, he as damaging to the interests of attorneys, for whose benefit they were supposed to be introduced, as they would be injurious to the interests of the clients. They would lead to inevitable abuses, which would render the present relations between solicitor and client of a less confidential and amicable character than at present existed.

THE LORD CHANCELLOR

said, he thought it somewhat unreasonable of his noble and learned Friend to complain that he had introduced this Bill without offering any explanation, because he had introduced much the same Bill last year on the 9th of July, it was read a second time on the 21st, he then explained its details, and a debate took place upon its merits, And when he presented this Bill this Session his noble and learned Friend was absent. Now, if he recollected rightly the substance of his noble and learned Friend's observations, his noble and learned Friend complained of this Bill on two grounds—first, that it altered the law—which would certainly be the case—and next, that it was a law of great antiquity. That complaint, also, was true, for this law, which partook of the error and absurdity of our ancient laws, was practically the last relic which remained in our institutions of the attempt by law to regulate the remuneration of persons employed in any trade, calling-or profession. Any man employing a sur, veyor, architect, or engineer was enabled to enter into a contract with him as to the remuneration which he should receive; but the solicitor and client were debarred from making any such contract. That ancient law of which his noble and learned Friend so much approved, laid down iron rules with respect to the manner in which a solicitor should be remunerated. The first evil attendant on this state of things was that a client, when he employed a solicitor, never knew to what amount of liability he was subjecting himself. If a man wished to sell an estate, and for that purpose applied to an auctioneer or agent, he would learn at once the commission he would be charged; but if he employed a solicitor he had no means of knowing what the amount of his bill of costs would be. He contended, therefore, that it was impolitic to maintain a restriction which prevented solicitors and clients from entering into arrangements which would meet the interests of both parties. The present mode of remuneration was really productive of injury to both parties. The solicitor derived a benefit from delay and procrastination, which were injurious to the client. The longer the time employed in performing the business, the greater would be the solicitor's remuneration. Now, if the parties were allowed to agree upon a certain amount of charge, there would be a pressure upon the solicitor to expedite the business, that he might the sooner receive what was due to him. The great evil of the present system was that the solicitor, in common justice to himself, was compelled to devise a mode of remuneration most injurious to the client, while, at the same time, it was by no means sufficiently beneficial to himself. It was this great vice, this old folly, which the noble and learned Lord sought to maintain. The attorney or solicitor was paid for every instrument which he prepared according to its length, and not according to its value. What was the consequence? Deeds swollen by redundant words, by a vast amount of useless verbosity, until the sense was obscured and the truth hardly discernible, offering great facilities for obscurity, error, and uncertainty. That is the system to which an attorney is now obliged to have recourse in order that he may obtain a proper amount of remuneration for his skill. A deed which at present consists of 100 folios of seventy-two words each might perhaps with advantage be condensed into twenty folios. But in such a case the attorney, being paid according to the length of the deed, would only receive one-fifth of his proper remuneration; so that he was compelled to adhere to a practice which he knew to be injurious, merely because the law prescribes to him only that mode of remuneration. There was an old saying that an attorney was rewarded for length and fined for brevity. His noble and learned Friend had said that very great evils would arise from placing attorneys in a position to be enabled to contract with their clients; but he (the Lord Chancellor) was at a loss to understand what possible evils could arise from that permission being granted. What harm could there be in allowing an attorney to say to his client who wished to sell an estate that the charge would not exceed £150. It must be observed that the Bill did not propose to give that power to any but clients who were perfectly competent sui juris, and able to enter into a contract. In all other cases—such as infants or married women—the ordinary bill of costs must still be sent in and be subjected to taxation. Instead of the proposed change being inexpedient, unjust, and mischievous, he believed that, if the profession generally were consulted, they would declare that the present system was inexpedient, unjust, and mischievous, because they are compelled to resort to a mode of remuneration which did not represent that which they ought to have, but which did represent that which they ought not to do. The noble and learned Lord had also spoken of great evils likely to follow from that part of the Bill which gave to the attorney a right to interest upon the amount of his bill of costs. But that was only a right which was enjoyed by all other persons who were employed to do work for others. A man having done his work sent in his bill and demanded payment, and from the time of such demand he was entitled to receive interest as compensation for the money which was detained from him. In the case of an attorney that was not so, but it was difficult to see why an attorney should be placed under disadvantages which no other persons were subjected to. The attorney, in many cases, was obliged to disburse large sums during the progress of the business, and when the business was completed it was only fair that he should receive payment, or be allowed to charge interest. His noble and learned Friend also complained that it was unjust to give to an attorney power to take from his client security for costs; but if there was one point of the Bill which he (the Lord Chancellor) thought would be more beneficial than another it was that very power. That a rule existed forbidding attorneys from taking security for costs had been regretted by many Judges. The Bill did not propose to interfere with the law as it stood with relation to what was called champerty and maintenance; but there were many cases in which a man was unable, for want of means, to recover what was due to him, and it was proposed to allow him to give a security for costs upon the amount he might recover. The object was to offer facility to the obtaining of justice, and to take away an impediment which now deprived many men, who had no other means of recovering it, of property due to them. His noble and learned Friend had made other objections, some of which referred to a clause which, indeed, was open to some question—the clause which provided that professional trustees should be at liberty to act as attorneys or solicitors, and to be remunerated for their professional services to the estate. For his own part, he should have preferred the clause as it stood in the Bill of last year; but that had not been the general feeling of the profession, and in deference to that feeling he had brought forward the clause in its present shape. The clause, however, would prevent much mischief from arising in cases where the remuneration of a solicitor trustee was not provided for. It constantly happened that a testator had great confidence in a particular solicitor or firm of solicitors, and therefore selected that solicitor or one of the firm to be one of his trustees, in order that his estate might have the benefit of the prudence, skill, and knowledge of the individual selected. But then the law stepped in and said that, as the testator had neglected to direct that the individual selected as trustee should act as solicitor and be remunerated as such, therefore the person so acting could not receive any remuneration, and should only be entitled to receive the actual costs out of pocket. There was nothing more discussed and considered in the profession than the question on which the Bill turned. That really was a very inconvenient rule, and he had known many cases of hardship where gentlemen, after devoting their time and attention to the winding-up of a testator's affairs, ultimately found themselves deprived of all remuneration for their labours. If some power could be placed in the hands of the solicitors by which they would be authorized in entering into arrangements with their clients, he thought they might be safely trusted to devise some mode of remuneration which would not only give them a fair return for their skill and time, but would enable them to act in a spirit more satisfactory to their clients. Such an arrangement he was confident would tend to the advantage not only of the clients, but also of the profession itself, for he knew nothing which had done more harm to the profession of the law as a science than the objectionable method in which attorneys had been remunerated. The present system induced long fees; these, in their turn, led to long abstracts, entailing infinite expense in all transactions with regard to real property, and more particularly in the case of unregistered estates. He did not deny that, with regard to the details of the Bill, some particulars might require careful consideration; but, in the main, he trusted that it was worthy to receive the approval of their Lordships' House.

LORD CHELMSFORD

said, he so fully agreed with his noble and learned Friend who had first addressed their Lordships that the Bill was vicious in principle, that he thought he was called upon to offer some remarks. He fully concurred also in the opinion of his noble and learned Friend on the Woolsack, that the present mode of remunerating solicitors for what was called conveyancing business was objectionable. In alluding, however, to the "verbosity and redundancy of deeds," he believed his noble and learned Friend had mistaken the effect for the cause; because it was not until 1843 that there was any power instituted for taxing attorneys' bills for conveyancing business unless the bills for conveyancing were mixed up with bills for other business. It was not, therefore, until 1843 that the present objectionable system was introduced; but his noble and learned Friend knew that long before that period leases, settlements, and conveyances had assumed all the verbosity of their present form. He believed that the prolixity of deeds arose from the fact that the practice had been in use for many years, that it had undergone the test of judicial criticism, and that conveyancers were generally afraid of departing from the usual custom, lest they should by Be doing incur the chance of creating a flaw in deeds. The conveyancers had adopted the old forms of deed because they were afraid to depart from them; and when it was proposed that the charges for preparing them should be fixed by law, the taxing-officers assumed that the fairest plan of fixing the charges would be by the number of folios they contained. But while his noble and learned Friend justly complained of the present objectionable mode of remunerating solicitors by folios and the number of words in each folio, yet in his Bill his noble and learned Friend proposed still to retain that system except in cases where an attorney was willing to enter into an agreement with a client. He, however, for his part regarded the client as the person who ought to be protected from the attorney. In entering into an agreement with a solicitor the client could not be expected to know what would be a fair remuneration for a solicitor's labour. The solicitor, on the other hand, knew perfectly well what he was entitled to, and would take care in his agreement to realize at least as much as he would have been enabled to charge under the old system. He understood that in Scotland attorneys were remunerated in conveyancing business according to the value of the property, and some such system might, he thought, be introduced into this country. Of course, the percentage upon a large property would not be the same as upon a small one. The method would, however, be much better than the one at present in use. The objection to which he had referred was the least that could be urged against the Bill introduced by his noble and learned Friend. He was afraid that his noble and learned Friend had looked at the subject in too narrow a view. The attention of his noble and learned Friend had been called to an objectionable mode of remuneration in one branch of the profession, and, instead of confining his efforts to finding a remedy for this particular evil, his noble and learned Friend had extended his proposal to the whole of that branch of the profession of the law, and proposed that solicitors in suits of every kind should be permitted to make agreements with their clients. Such a course would place the client at the mercy of his attorney, and enable the latter to extort whatever he pleased. He quite agreed with his noble and learned Friend in the opinion that attorneys as a rule were not likely to enter into any agreements which would be unfair. He quite admitted that as a body they were honourable and high-minded men, and to honourable men conscience was a sufficient law; but they must recollect that there were amongst them men who did not deserve that character, men who were not respectable, and these were more likely than the general body to come in contact with the humbler classes on whom the Bill would enable them to prey. His noble and learned Friend on the Woolsack had described the existing arrangement as a relic of ancient barbarism. He could only say it was a provision made by the Legislature for the protection of one of the parties concerned against the undue influence which the other might exercise over him. In 1605, during the reign of James I., an Act was passed to repress the misdemeanors of attorneys and solicitors, and to prevent unnecessary suits and charges. It was enacted by that statute that no solicitor or attorney should be allowed any fees alleged to have been paid to any serjeant-at-law or counsellor, unless he could exhibit a docket signed by the serjeant-at-law or counsellor acknowledging the receipt of his fee; and that practice prevailed at the present day. It was also provided that no fees should be recovered by an attorney from any of his clients until the former had submitted a detailed bill of fees. From 1605 down to 1729 there was no inherent power in the courts of law to tax the bills of solicitors, although as officers of the court, solicitors and attorneys were subject to suspension or removal in case they were found guilty of extortion. But in the year 1729 the Act 2 Geo. II. c. 23, was passed, whereby it was provided that, before a solicitor could institute proceedings against his client for his costs, he must deliver to him his Bill one month previously, and if, on taxation, one-sixth of its amount were struck off, the attorney was subject to the costs of taxation. That system continued down to 1843, and worked so well that in that year conveyancing and all other business was brought under the operation of the rule. The present measure would deprive clients of that protection, and he thought this was to be regretted. He might remind their Lordships that there were two kinds of costs—the costs between party and party, which the loser was obliged to pay, and the costs between client and attorney, which were taxed, but which each party had to pay for himself. The present Bill, however, would deprive the client of the protection of taxation in regard to the costs he owed to his agent, apart from those which were recognized between party and party by the courts of law.

LORD CRANWORTH

said, that the principle of the Bill was to leave clients and attorneys to settle the charges between themselves, and that principle, in his opinion, was so sensible and convenient that he held the burden of argument lay with those who sought to deviate from it. It was true that up to 1843 conveyancing business had not been taxed unless in litigious business; but there was not formerly much conveyancing business exempt from litigation, in consequence of the frequent necessity for suffering recoveries and levying of fines in the case of entails. He doubted whether taxation had done much good in checking the length and tediousness of conveyancing transactions, and he did not know that the Bill would have much effect in that direction, but was at least a right step. There were some of the clauses with which he could not agree, but he believed that the ordinary principle of allowing parties to bargain for themselves ought to prevail in the matter of costs of conveyancing as in other matters; competition would soon produce a class of solicitors who would do the business of the client upon the best terms for him, and so in the long run the client would get the benefit. It should be borne in mind that the case of conveyances was one in which the attorney would have always to deal with educated persons, who might be presumed to be able to take care of their own interests; but then the case of contentious litigation was altogetner different, and so far as that was concerned he entirely concurred in what had fallen from his hon. and learned Friend opposite. In that case the costs which the losing party would have to pay were duly fixed by the court, and if by means of any previous contract the attorney was able to get more than the amount so fixed, an injury would thus far be inflicted on his client. He was therefore of opinion that great difficulties would be the result if the House were to depart from the salutary rule that costs in contentious cases should be taxed and fixed by the court. He also objected to the proposal that a trustee being an attorney should be able to charge his own costs; for if there was any one principle better established in equity than another it was that no man having a fiduciary duty to perform should be able to place himself in a situation in which the obligation upon him to cut down expense should be in conflict with his interest to increase it. He did not, he might add, see the remotest reason why a solicitor should not be enabled to take security for costs; but, although he thought the Bill as a whole was of sufficient importance to entitle it to a second reading, he was of opinion that it would require considerable modification in Committee.

On Question? their Lordships divided:—Contents 21; Not Contents 23: Majority 2:—Resolved in the Negative.

CONTENTS.
Westbury, L. (L. Chancellor.) Eversley, V.
Stratford de Redcliffe.V.
Sydney, V.
Devonshire, D.
Somerset, D. Abercromby, L.
Clandeboye, L. (L. Dufferin and Claneboye.)
Normanby, M.
Cranworth, L.
Clarendon, Foley, L. [Teller.]
Cottenham, E. Ponsonby, L. (E. Bessborough. [Teller.]
De Grey, E.
Granville, E. Somerhill, L. (M. Clanricarde.)
Harrowby, E.
Saint Germans, E. Sundridge, L. (D. Argyll.)
Spencer, E.
NOT-CONTENTS.
Bath, M. Chelmsford, L.
Salisbury, M. Colchester, L.
Colville of Culross, L. [Teller.]
Belmore, E.
De La Warr, E. De L' Isle and Dudley, L.
Derby, E. Dunsany, L.
Devon, E. Kingsdown, L.
Ellenborough, E. Redesdale, L.
Malmesbury, E. Silchester, L. (E. Longford.)
Hawarden, V. [Teller.] Saint Leonards, L.
Hutchinson, V. (E. Donoughmore.) Walsingham, L.
Wentworth, L. (V. Ockham.)
Bagot, L. Wynford, L.