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Solicitor Client Costs Assessment: Statute Bills

When is a Client Bill, Not a Statute Bill?

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What is a Solicitor Client Costs Assessment?

Solicitor client assessments are a form of detailed assessments which take place, often in civil litigation matters, when a client wishes to challenge the costs claimed by a Solicitor within their bill under the Solicitors Act 1974. A client may consider that costs listed on a Solicitor’s bill were unreasonably high or unreasonably incurred, or that informed consent was not obtained from the Client under CPR 46.9(2)

Solicitor Client assessments are undertaken on an indemnity basis in favour of the Solicitor, and therefore in order to challenge the costs claimed, there must be a good reason to do so otherwise the Client will end up paying additional fees of the assessment process.

 

What is a Statute Bill? 

A Statute Bill is an invoice in which a Solicitor bills their Client for the work carried out on their case, and the contents of the same are final for the period they cover.  Such a bill must be compliant with the Solicitors Act 1974, and must be signed and properly served on the Client. Interim bills may also be considered as statute bills, but only under certain circumstances.

Serving a compliant and effective Statute Bill means that there are automatic time limits in place for a Solicitor Client costs assessment.

Client Costs Assessment Time Limits

The Client will have time limits in place to challenge a Solicitor’s bill by requesting a Solicitor Client costs assessment, which is usually one month from the date the Statute Bill was received.  If an assessment is requested within one month of receipt, there is an automatic entitlement for an assessment order to be made. If the fees remain outstanding and the bill is yet to be paid, then this time limit increases to twelve months.

If the invoice has been paid (and one month has passed), the Solicitor has obtained judgment for the outstanding fees, or if the invoice remains unpaid and twelve months have passed, then only under exceptional circumstances will an assessment be permitted.

If the bill has been paid and twelve months have passed, then there is no entitlement to request an assessment.

 

When is a Statute Bill Not a Statute Bill?

In order for an invoice/bill to be deemed a statute bill, it must comply with the Solicitors Act 1974. There are other factors which must be taken into consideration when serving interim bills and final bills to ensure that they are considered statute bills.

It is important that a Solicitor is knowledgeable as to what/what does not constitute a statute bill.  If no such bill is served, then the Solicitor leaves their fees open for dispute, as no timer is yet ticking down on the timeframe in which the Client can contest the bill.  

Interim Statute Bills 

It is often the case that a Solicitor will send out interim bills to their Client during the course of the action or whilst the retainer still remains in place for payment on account of interim costs. Interim bills differ from final statute bills in both their contents and the time frame, as mentioned above.

Common law dictates that in order for any interim bill to be consider a statute bill, it must be clearly provided for within the retainer.  If the retainer fails to provide the Solicitor with a clear contractual right to produce interim statute bills, then any doubt will be resolved in favour of the Client, and it is likely that interim bills will be considered to be requests for payment on account, irrespective of their content.

Richard John Slade (t/a Richard Slade and Company) v Boodia & Anor [2018] EWCA Civ 2667

In this matter, it was found by the Court of Appeal that although the interim bills did not include both profit costs and disbursements, this did not mean that they could not be rendered as interim statute bills due to the wording of s.70(6) of the Solicitors Act 1974. As such, it was found that the bills in question were in fact interim statute bills, and were thus out of time for a Solicitor Client costs assessment to be requested in line with the aforementioned time limits set out in Solicitors Act 1974.

It was also found that the interim bill itself should state that it is ‘final for the period it covers’ in order for it to be classed as a statute interim bill, and for those time limits mentioned above to apply.

 

Chamberlain Bills

A Solicitor can also submit regular interim invoices throughout the case which are not statute final bills, and then submit a final statute bill at the end of the case, referred to as a Chamberlain bill. Chamberlain bills arise from the case of Chamberlain v Boodle and King [1982] 3 All ER 188.

In this case, the retainer terms did not allow for bills which were self-contained but did allow for statements to be served. The interim bills served were regarded by the Court as one bill allowing for one complete case, divided into parts.

Bari v Rosen [2012] EWHC 1782 (QB); [2012] 5 Costs LR 851

In the case of Bari v Rosen,  the Defendant Solicitor had submitted 12 bills to their Client over the course of the retainer, totalling ten months. All of these bills were paid promptly. When an application was made for an order to assess the bills, the Court found that the Defendant Solicitor had no right to serve interim statute bills as the retainer did not give this contractual right. It had not been suggested that the bills had been natural breaks in the litigation, and thus the Bills were treated as a series of bills making up a single final bill, which is classed to be delivered at the date the last of the series was served. The Court, at paragraph 15, held that:

“… a Solicitor may contract with his Client for the right to issue statute bills from time to time during the currency of the retainer. Such bills are known as “interim statute bills”. They are nevertheless final bills in respect of the work they cover, in that there can be no subsequent adjustment in the light of the outcome of the business. They are complete self-contained bills of costs to date.”

 

Vlamaki v Sookias & Sookias [2015] EWHC 3334 QB

Another case which dealt with the question of “what constitutes a statute bill” is the case of Vlamaki v Sookias & Sookias. In this matter, the Court concluded that the series of bills served by the Defendants as interim bills should actually be considered as a single bill and the date of service should be deemed as the date of service of the last series, similarly to the case of Bari v Rosen.  The retainer itself stated that interim bills would be sent to the Client, but that a final bill would be sent on conclusion and it was not stated that the interim bills would be final for the period they covered.

There were three main key points which were decided in this case:

  1. The case of Bari v Rosen [2012] EWHC 1782 (QB); [2012] 5 Costs LR 851 was used to state that if there is an ambiguous issue at hand and this issue relates to an aspect which is fundamental in the retainer, and this issue cannot be resolved, then it should be decided against the Solicitor and in favour of the Client.
  2. Paragraphs 24-25 of the Judgment state that when a retainer allows for interim statute bills to be rendered, then these bills should contain a statement which expressly states that the interim bill is final for the period that it covers.
  3. At paragraph 38 of the Judgment, it was held that a letter submitted by the Defendant stating that no further invoices would be rendered, did not change the nature of the bills.

In line with those findings, an application for detailed assessment was deemed premature.

Summary

In recent years at has become increasingly common for Clients to contest their Solicitor’s fees months, and sometimes years, after the work has been concluded.  This right to assessment has only been enabled by the Solicitor having failed to get their retainer right in the first instance to provide for interim statute bills, or failing to serve a final statute bill at all.

At ARC Costs we would therefore recommend you review your retainer to ensure the contents in respect of interim and final billing are as intended, and also to ensure that on conclusion of any case, you ensure a final statute bill is sent out promptly to ensure the 1 month time period runs down promptly to avoid any subsequent delayed request for an assessment of costs.

How Can ARC Costs Assist?

ARC Costs are specialist independent Costs Lawyers and Costs Draftsmen who can assist in the recovery of your costs. Alternatively, if you have been subject to unreasonable costs, we can assist in disputing the same.

If you require assistance in respect of your retainer, billing arrangements or in defending a challenge to a statute bill, we can act on your behalf. As costs specialists we will ensure any statute bill and accompanying cash account is compliant, and to ensure that any subsequent Bill of Costs to be prepared following an order for assessment includes the totality of your costs.

If you are the Client of a Solicitor and you believe the fees charged against you are unreasonable, we can assist in disputing these fees. We can do this through negotiations, Part 8 proceedings, Points of Dispute and as Costs Lawyers, we can represent you at any Detailed Assessment Proceedings.

Should you wish to discuss your query with us, please do not hesitate to contact us on 01204 397302 or via email at info@arccosts.co.uk. Alternatively, you may complete our instruction form, and a costs specialist will contact you to discuss your query.

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