Statute Bill of Costs & Implications of the Same
When Can a Statute Bill be Delivered, and What is the Impact on Assessment?
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What is a Statute Bill?
In order for an invoice/bill to be deemed a statute bill, it must comply with the Solicitors Act 1974.
Two important factors which need to be considered in ensuring a statute bill is compliant with the Solicitors Act 1974 are that the statute bill, whether a final bill or interim bill, must be signed as per Section 69 (2A) (this can be an electronic signature). Furthermore, Section 69 (2C) states that the statute bill must be delivered to the party personally responsible for the payment of the bill.
If a Solicitor’s bill is served to their client, the Solicitor can sue for payment of the bill. Furthermore, if a Solicitor serves such a bill to their client, the client can challenge the bill by asking the Court to assess the bill under Section 70 of the Solicitors Act 1974. For further assistance on challenging a Solicitor’s bill see here.
Statute bills do not have to be raised at the end of the case only, but can be raised throughout the duration of the retainer (so long as the retainer allows for interim statute bills to be raised). If the retainer does not allow interim statute bills to be raised, or alleged statute bills do not include the necessary information, they will be deemed as requests for payment on account. If the statute bill is not deemed to be final, then it is seen as an interim bill or a request for monies on account. When this is the case, the time limits set out under section 70 of the Solicitors Act 1974 do not apply.
On assessment, the Solicitor can increase the amount of monies being claimed (within the scope of the retainer), and if a bill is not paid, the Solicitor can terminate the retainer.
Richard John Slade (t/a Richard Slade and Company) v Boodia & Anor  EWCA Civ 2667
This case included Richard Slade and Company (the Solicitors firm) and Mr and Mrs Boodia (the client of the firm) as the parties. The clients signed a retainer in 2013, instructing the firm to act on their behalf. The clients went on to cancel instructions in November 2016. By the time instructions had been cancelled, there had been a total of 61 bills generated by the firm to the clients. 43 of these bills were in relation to profit costs, and the remainder were relating to disbursements. The client refused to pay the final four bills generated and asked the Court to have the bills assessed by issuing a Claim Form under the Solicitors Act 1974.
The retainer which had been signed by the clients included the following term:
“Bills are rendered monthly in arrears. Our bills are detailed bills and are final in respect of the period to which they relate, save that disbursements (costs and expenses which we incur on your behalf) are normally billed separately and later than the bill for our fees in respect of the same period. Please do not assume, therefore, from a bill for our fees which does not refer to any disbursements that no disbursements were incurred during the period. The more usual situation is that disbursements will have been incurred and will be billed separately.”
At the hearing on first instance, Master James found that whilst the aforementioned agreed retainer allowed for interim statute bills to be raised, that by definition a statute bill should be final for the period covered and therefore include both profit costs and disbursements. As the bills rendered during the course of the retainer in this case did not include both profit costs and disbursements, then they were concluded not to be interim statute bills.
The Defendant was granted permission to appeal, and this was unsuccessful in front of Slade J in the High Court. The Defendant then appealed to the Court of Appeal.
At the Court of Appeal, the Lord Justices considered the lower Court’s findings that a statute bill must include both profit costs and disbursements. The Court of Appeal held that this was not correct. Section 70 (6) of the Solicitors Act 1974 stated that a statute bill could include both profit costs and disbursements however, it was found that the wording of this section did not state that the statute bill must include both these factors.
Due to this, the appeal was allowed, and thus the majority of interim statute bills were considered to be of a Chamberlain bill in format, and out of time in accordance with the Solicitors Act, to be challenged. It was found that simply because a bill did not include both profit costs and disbursements did not mean that this was not a statute bill.
How Can ARC Costs Assist?
If rendered interim or final statute bills have been sent to the client, the Solicitor is capped in what can be recovered from the client, or on an inter-partes basis. A bespoke Bill of Costs therefore needs to be drawn in such cases.
In addition, if a client wishes to challenge a statute bill (in relation to solicitors fees/success fee deductions), they must be applying for assessment within strict timescales (within 1 month if the statute bill has been paid, and within 12 months if it remains unpaid), save for exceptional circumstances.
ARC Costs are specialist Costs Draftsmen and Costs Lawyers who can assist with the recovery of or challenging of legal costs. We can assist in preparing Bills of Costs, negotiating costs, preparing Points of Dispute and Points of Reply, and representing you at detailed assessment. Whether you are the receiving party or the paying party, we hold vast experience on both disputing costs and defending the same. If you require our assistance or would like to discuss your query on costs, please complete the online form, and one of our costs experts will contact you to discuss. Alternatively, you may call us on 01204 397302 or email us at firstname.lastname@example.org.
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