The High Court has ruled that a dispute over legal costs and a former partner’s capital account can proceed under a settlement agreement between two solicitors’ practices, without the plaintiffs having to start fresh proceedings.
Mr Justice O’Connor’s judgment, delivered on 8 April 2020, addressed the parties’ application to enforce settlement terms after the underlying action had been struck out by consent in July 2018, with liberty to apply to enforce the settlement.
The plaintiffs sought orders concerning the costs of 168 transferred client files and the valuation of Michael Boylan’s capital account in the plaintiffs’ firm. The court rejected the first and third defendants’ procedural argument that fresh proceedings were required. It said the earlier order expressly allowed parties to apply to enforce the settlement, and requiring new proceedings in this case would be “pedantic”.
Under the settlement, the parties’ cost accountants were to agree the sums due to the plaintiffs for files transferred to the new practice. If they could not agree, a third legal costs accountant was to make a binding determination. The court found that the accountants disagreed and that an instruction to one of them to hold back was not an option under the agreement. It said the accountants should be free to engage with Brendan Cooke, or another accountant they agreed to appoint, and determine the costs for each file.
However, the judge did not make an order at that stage directed to Cooke or the accountant who was to value the capital account. Neither had been represented at the hearing. The court said it would hear counsel on the precise terms of any order to allow the costs process to proceed, and permitted a future application by notice of motion if a substitute accountant became necessary.
The settlement also provided for Declan Walsh, or an accountant in his practice, to determine any dispute about Boylan’s capital account. Boylan argued that the result of an ongoing Revenue audit was needed first. The judge said Walsh had not stated that the audit’s outcome was necessary, and that he should be engaged and allowed to advise whether and when he could determine the issue. The judge said there would be no need to engage Walsh if the relevant parties agreed a figure.
The judgment did not itself set the costs due or determine the value of the capital account. It invited the parties to exchange proposed orders by 17 and 24 April 2020, respectively, so an order could be perfected by consent where possible.