Kerry Underwood

SOLICITORS’ BILLS, LIMITATION ACT AND ACKNOWLEDGEMENTS

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I deal with this in my book  Personal Injury Small Claims, Portals and Fixed Costs, which runs to three volumes and over 1,300 pages and available from Amazon here, or me here for £50.00

 

In Phillips and Co (a firm) v Bath Housing Co-Operative Ltd [2012] EWCA Civ 1591

the Court of Appeal held that a solicitor’s claim for costs, billed but not yet fixed by assessment or agreement, fell within the definition of “debt or other liquidated pecuniary claim” in section 29(5)(a) of the Limitation Act 1980, and thus was capable of acknowledgment, causing the six year limitation period to start running again.

Here, the work was completed in 2003 and as the solicitor’s fees had not been agreed, the solicitor was entitled to a reasonable amount under the quantum meruit rule.

On 10 September 2004 the solicitor claimant wrote to the client defendant stating the amount claimed.

On 20 September 2004 the client defendant replied, objecting to the amount.

On 8 September 2010 the solicitor sued and the client pleaded the lapse of time under the Limitation Act 1980, that is that more than six years had passed since the work was carried out.

The Court of Appeal held that the letter of 20 September 2004 was an acknowledgement under section 29(5) of the Limitation Act 1980 causing the six year period to start running again, and consequently the claim was in time and not statute-barred.

That left the issue of whether a claim for solicitor’s fees, absent a formal Contentious Business Agreement or Non-Contentious Business Agreement, was a claim in debt in the nature of a quantum meruit, as compared with a claim in damages.

It was, said the Court of Appeal. It was not relevant that it was not quantified unless and until it was either assessed by the court or agreed by the client or the subject of a judgment.

This was the first decision of the Court of Appeal on this point, even though the relevant provision had originally been in section 23(4) of the Limitation Act 1939.

The Limitation Act 1623 made no provision for time start again due to an acknowledgement or part payment but the courts got round this by treating an acknowledgement or part payment in the first six years as a promise to pay which revived the original action, described in Spencer v Hemmerde [1922] 1 AC 507 as “the task of decorously disregarding an Act of Parliament.”

Lord Tenterden’s Act of 1828 gave statutory effect to the policy of the courts.

In Thomas Watts and Co (a firm) v Smith [1998] 2 Costs LR 59

the court held that an unquantified debt due to a solicitor was analogous to a court case where judgment for damages to be assessed is given.

Here the Court of Appeal said:

“17. On the other hand, the liability of the client is clearly one in debt rather than in damages. A quantum meruit liability is in the nature of a debt, even if it has not yet been quantified in a binding manner between the parties.

  1. In Coburn v Colledge [1897] 1 QB 702 the solicitor’s cause of action was held to accrue as soon as the work is complete. The Court of Appeal said that a writ could have been issued at that time, though non-delivery of a bill might be a defence. It was not a necessary element of the cause of action for the solicitor to allege and prove that a bill had been delivered. Lopes LJ said at page 708 that “the solicitor would have sued in indebitatus assumpsit or on a common money count for work and labour”. Similarly, under section 69 of the 1974 Act, absent special circumstances mentioned in section 69(1), the solicitor cannot issue proceedings for recovery of the costs until the month has elapsed, but nevertheless the cause of action is complete before delivery of the bill.
  2. What I draw from these cases is that a solicitor’s claim for fees in circumstances such as this (leaving aside, therefore, cases of contentious or non-contentious business agreements) is a claim in debt (as opposed to damages) in the nature of a quantum meruit, but that it is not quantified unless and until it is either assessed by the court or agreed by the client or is the subject of a judgment (whether or not preceded by an assessment), and that the court’s task of assessment is to be carried out by a judicial process by reference to the relevant legislative provisions.”

 

A claim for damages for negligence or nuisance is not capable of acknowledgement under section 29(5)  – see

In Dwr Cymru v Carmarthenshire County Council [2004] EWHC 2991 (TCC)

 

Here, the Court of Appeal held that it did not need to decide whether a solicitor’s unquantified bill was a “debt” or an “other liquidated pecuniary claim.”

“One way or the other it is within the statutory phrase.” (Paragraph 48)

 

Acknowledgement

This will be a question of fact in each case and here the court noted that the client had expressed concern about the amount of the claim, but not about the fact of there being a claim at all.

The Court of Appeal said:

“If the letter had been entirely non-committal about the substance of the solicitors’ claim, then it may not have acknowledged anything, for example if the gist of it had been: we have received your letter, but we are under too much pressure to deal with it now, for reasons specified (or not), and we will come back to you when we have time.”

 

 

 

 

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Written by kerryunderwood

June 13, 2018 at 8:37 am

Posted in Uncategorized

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