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Sender:
Scott F Dickson
Date:
Tue, 10 Aug 1999 21:50:24 +0100
Re:
Payments under protest

 

This is a brief response to Hector's query.

I am not completely convinced that party-agent accounts are such a great example. I assume that your student is compiling examples of transactions where protest (or just plain qualification) can eventually lead to restitution. For the record, there are similar provisions in the Solicitors (Scotland) Act 1980 (c 46), s 39A. It is a bad example because the motivation for a solicitor making a refund is not the general law on restitution (or even an agreement to repay) but rather the fact that it will be professional misconduct to retain an excessive fee (that is, one which exceeds a taxed amount). In the Scottish provisions, a solicitor can be suspended from practice until they comply with certain requirements - one of which is, not surprisingly, repayment of the excess amount (s 39A(4)(b)). A statutory right to restitution? In the wider sense, yes. If the solicitor chooses to commit professional suicide and retain the excess, the sum could be recovered on the usual principles of unjust enrichment.

We could ignore the statutory provisions and take two further examples. (A) The client pays the account and qualifies the payment (call it a protest if you like) by saying that they reserve the right to submit the account to the auditor of court and they also reserve the right to claim back any overpayment. The solicitor agrees. The account is taxed lower and the client claims a refund. This sounds like a contract claim to me, at least in Scots law. (B) The client pays and qualifies the payment as before. The solicitor does not expressly agree to the qualification. This may still be a contract claim; alternatively the cause of action may be in unjust enrichment.

On the wider issue of protest, I cannot see that a payment made under protest is more susceptible to restitution because of the mere fact of protest. Many payments are made grudgingly, many under protest. The formal nature of a protest is not, in my view, particularly strong. It is like saying that all pursuers/plaintiffs should be entitled to succeed with their litigation merely because they are angry or merely because they have gone to the bother of raising proceedings in the first place. You might say that this kind of payment is actually a conditional payment - *I am paying you this sum; but if it transpires that I am not liable to pay it to you I reserve the right to claim it back*. The law, however, already protects you - by the obligation, ex lege, to make restitution for payments which are undue. That is what the law on restitution is all about - it protects you in certain circumstances, without the need to set up a consensual framework before making a payment. In the same way, the law of delict/tort also operates *on the fly* to protect you - there is no need for you to get the agreement of your fellow footballers in the changing room before a game that if they negligently (or intentionally) cause you injury during the game they will compensate you. Like protests, this sort of behaviour is pretty inefficient.

It may, however, be useful to point out that a protest may be an indicator of the existence of something else (for example: mistake, compulsion, inequality, or some other (uncategorised) sort of apprehension as to the liability to pay (as in Woolwich v IRC)). Protest by itself should not be added to the list of unjust factors just yet.

I hope that this helps.

 

Scott

Solicitor, Glasgow
Office: 0141 248 2484 (t) 0141 332 5355 (f)


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