But lawyers warn efforts to discover undisclosed commissions are not over
The Court of Appeal’s decision this week in Turner v Coupland Cavendish [2026] EWCA Civ 1204 “is likely to reshape the way Solicitors Act assessments are currently litigated”, the successful barrister, Erica Bedford, has claimed.
But solicitors have been warned that it will not end former clients trying to find out if they received an undisclosed commission from their after-the-event (ATE) insurers.
The court was hearing an appeal against Mr Justice Sweeting’s decision last year that the claimant – the law firm’s former client – could issue a part 18 request for information concerning the ATE insurance premium disclosed in the cash account, namely whether the firm (which trades as Gowing Law in Manchester) had received an undisclosed commission.
In doing so, Sweeting J overturned the finding of the then Costs Judge Rowley, now the Senior Costs Judge, that there needed to be a “positive case” that a commission had been paid and there was not one here.
In a unanimous ruling handed down by Lady Justice Andrews, the court – sitting with Costs Judge Whalan as assessor – overturned Sweeting J. It held that:
- Regardless of whether the cash account was truly in dispute, the request was not in respect of a “matter in dispute in the proceedings”; it was therefore illegitimate and there was no power to direct a response to it;
- The costs judge had no power to carry out any inquiries into the accuracy, let alone the lawfulness, of any items on the cash account which were neither payments on account of the bill nor amounts received on behalf of the client which could lawfully be used to pay it;
- There was no obligation on the costs judge to resolve all disputes (or prospective disputes) in respect of the cash account before certifying what is due to or by the solicitor in respect of the bill and the costs of the assessment under section 70(7) of the 1974 Act; and
- Even if the request had been legitimate, the costs judge was entitled to refuse to order a response in circumstances where no formal application had been made for such an order and the questions to which a response was sought had not been placed before him.
But the court was not impressed by a failure to confirm whether a commission had been paid on the £245 premium, saying it was “unwise”.
Andrews LJ said: “If they did not receive a commission, it would be simple enough to give the client express confirmation if they ask for it. Refusing to do so simply reinforces suspicion, and, on the face of it, would justify the client in seeking an account (for which the solicitors might end up having to pay the costs, since their refusal to answer could well be considered unreasonable).”
But this did not justify the claimant’s solicitors, JG Solicitors in Leeds, using the “device” deployed here and in other cases “try and avoid taking proceedings for an account”.
Praising the approach of SCJ Rowley, the court questioned the economics of bringing a claim over what probably amounted to no more than £25.
We have published separately a more detailed analysis of the ruling from Costs Lawyer Nick McDonnell, a director of Kain Knight, who instructed Ms Bedford.
Ms Bedford said: “This decision is likely to reshape the way Solicitors Act assessments are currently litigated. For several years, the boundaries of the statutory jurisdiction have been tested and attempts made to expand the concept of an assessment beyond arguments about ‘costs’.
“The Court of Appeal has now drawn those boundaries with real clarity and, in doing so, provided much needed guidance in this area. It resolves longstanding uncertainty about the relationship between the cash account as well as bringing clarity to somewhat prior opaque boundaries of the statutory assessment process. It is likely to be a decision that will be felt across the sector for years to come.”
Writing on the Hailsham Chambers website, she added that the judgment “closes the door on an increasingly widespread practice” of using part 18 requests to compel investigations into potential secret commissions on ATE insurance policies, “a practice the court found lacked a proper jurisdictional basis”.
In this respect, the Court of Appeal found too that the prior 2022 authority of Raubenheimer v Slater and Gordon UK Ltd was wrongly decided and ought no longer be followed.
But the comments also indicated “the level of sympathy a court is likely to have toward applications brought on the correct jurisdictional footing where a solicitor has refused to provide the relevant information.
“Whether the firms acting for clients in this area will take up the mantle of proceeding via applications for an account pursuant to part 40 or part 67 remains to be seen. To this extent, solicitors’ firms will still be well advised to treat any requests for such information with a degree of seriousness.”
James Green, managing director of JG Solicitors, said: “We recognise that the Court of Appeal has allowed the appeal and has been critical of the route adopted to obtain information about possible ATE commissions within the solicitor-client assessment proceedings.”
But he said it was “important… to put that criticism in context”, namely that its approach was expressly approved on first appeal.
“There are also important parts of the Court of Appeal’s judgment which should not be overlooked,” Mr Green continued. “The court expressly confirms that it is incumbent on a solicitor to inform a client if they receive a commission or other financial reward from an ATE insurer.
“Lady Justice Andrews describes a refusal to answer whether such a commission was received as ‘unattractive’ and ‘unwise’, and says that such a refusal may justify proceedings for an account and may expose the solicitor to costs if the refusal is considered unreasonable.
“The court also recognises the practical unfairness faced by clients who are required to produce evidence of a commission where the relevant information is likely to be exclusively within the solicitor’s knowledge, and expressly identifies that as an issue which may require attention from the rule committee or Parliament.
“So while the Court of Appeal has rejected the procedural route adopted in this case, that route had previously been approved by the High Court, and the judgment leaves the underlying fiduciary obligation on solicitors to disclose commissions and other financial rewards firmly intact.”
Mr McDonnell commented that practitioners have been facing part 18 requests “built on the assertion that the cash account is in dispute, often with nothing behind the assertion at all” – and the Court of Appeal “has now drawn the line clearly”.
“Firms on the receiving end of these requests should read paragraphs 67-68 closely and should be prepared to say that questions about commission are simply not matters the costs judge has to determine in assessing the bill.”
He disputed any suggestion that the Court of Appeal has left former clients facing an expensive alternative to challenge the cash account.
“If there is a genuine basis for believing that a solicitor has received and failed to disclose a commission, a client can pursue the appropriate remedy. Depending on the value of the claim, proceedings may well fall within the small claims track, where the client could act in person and would ordinarily have very limited exposure to the other side’s legal costs if unsuccessful.
“There are also complaints routes through the Legal Ombudsman and, where appropriate, the Financial Ombudsman Service, neither of which requires the client to incur the costs of court proceedings.
“The real costs problem arose from trying to turn the commission issue into part of an existing Solicitors Act assessment. The clients themselves had not chosen to incur substantial costs pursuing standalone commission claims; firms such as our clients were having to incur costs defending Solicitors Act proceedings in which part 18 requests were then being used to investigate whether some separate claim might exist.
“That was particularly significant when the same approach was being adopted across hundreds of cases.”
Mr Green instructed Robin Dunne and Priya Gopal of Gatehouse Chambers. In an article on its website, they stressed that the comments of the court meant the issue of secret commissions had not been put “to bed”.
“The court did not conclude that the client was not entitled to the information sought – rather, the court concluded that they are simply not entitled to the information through Solicitors Act assessment proceedings. The solicitors’ obligations as a fiduciary remain unscathed.”
Irrespective of any change in the law as floated by Andrews LJ, “it now appears that a former client who asks such questions of their solicitor will be entitled to an answer”, they went on.
“If no answer is provided, the client will be able to bring a claim for an account; this will be far more expensive than dealing with the issue within the confines of a Solicitors Act assessment. A solicitor who unreasonably refuses to answer is likely, considering Andrews LJ’s guidance, to have to pay the costs of any such claim…
“For a client, it matters not in which context they are able to obtain answers; it only matters that they receive the information they seek. This decision makes it almost impossible for the solicitor to avoid the issue.”