Kerry Underwood

THE BILL TO THE CLIENT AND CALCULATING THE AMOUNT DUE FROM THE CLIENT

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In relation to costs recovered from the other side, a bill must be delivered to the client and will normally be along the lines of:

“To Mr & Mrs Jones (payable by Dennis the Defendant)”

If the recovered costs are fixed, then there is no need to provide any further details in the bill, beyond saying that the costs are fixed in accordance with the Fixed Costs Scheme, or whatever.

In non-fixed costs cases there should have been correspondence with the client as to whether or not the sum proposed by the paying party is acceptable, and there should be wording along the lines of:

“As advised to you in correspondence, and full details of which are available on request.”

If you are limiting the total charge to the client by reference to a percentage of damages, then it is unlikely that the amount recovered from the other side will affect the actual charge to the client.

However, what it will do is to alter the figure which is unrecovered solicitor and own client costs and that element, if any, which is the success fee.

The charge to the client can be done in two separate bills, one setting out the balance of unrecovered solicitor and own client costs and the other one setting out the amount of the success fee, if any.

The reason for that is that it will generally show a low, or indeed non-existent, success fee as most of the charge, if not all, will be solicitor and own client unrecovered costs.

Solicitor and own client basic costs are far harder to attack, as compared with a success fee, especially if the Conditional Fee Agreement is a Contentious Business Agreement.

As we know the level of success fee is now under attack, and thus the lower it turns out to be, the better.

The invoice to the client in relation to unrecovered solicitor and own client costs should be a full narrative bill with the full charge but then stating:

“Less recovered costs as per separate invoice number …”

Often, due to the total charged to the client being capped by reference to damages, you will not be charging the full gap between solicitor and own client costs and recovered costs, in which case the following wording can be added:

“But capped at £X being X% of damages as per our agreement.”

If you are charging a success fee and if the balance between solicitor and own client costs and recovered costs does not hit the cap, then the balance is indeed a success fee and the narrative in the invoice should read:

“Success fee being the difference between unrecovered solicitor and own client costs as per invoice… and the agreed maximum charge to you of X% of damages – £X  -which amounts to a success fee of X%.”

The success fee is calculated on the full base rate, not the recovered element.

Thus if the rate is £400.00 per hour and the total solicitor and own client costs, whether recovered or not, are £10,000.00 and after charging the client the unrecovered element, the balance due by way of a success fee is £1,000.00, then that is a success fee of 10%.

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Written by kerryunderwood

June 19, 2018 at 10:42 am

Posted in Uncategorized

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