CLIENT CHALLENGES TO BILLS: IMPORTANT GUIDANCE

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In Allen v Brethertons LLP [2018] EWHC B15 (Costs) (02 October 2018)

the Senior Courts Costs Office ordered the defendant solicitors to deliver a bill of costs, pursuant to its jurisdiction under 68 of the Solicitors Act 1974 and CPR 67.2.

The case has several points of interest.

It confirmed the requirement that a bill must be delivered to the client in relation to all costs received, including portal fixed costs paid by the other side.

Here the bills were addressed to the claimant at his home address and described as “Payable by Ageas Insurance Ltd” but not delivered to the claimant.

The court ordered delivery of bills, for that and for other reasons.

The case confirmed that a statement reading:

“Therefore, if you obtain £10,000 compensation I would be able to deduct £2500 towards my success fee and you would receive £7500 …”

meant just that and so the solicitor could not deduct a further £150 in respect of the unrecovered element of a medical report fee.

There were also mathematical errors in the calculation of the extra sum claimed and the balance due to the client and none of the disbursements appeared in any bill, whether delivered to the claimant or not.

The reference throughout the “success fee” was wrong – much of it was unrecovered solicitor and own client costs.

Costs, even fixed costs, always belong to the client.

Where the amount of recoverable costs is prescribed by statute, those costs are not open to challenge by a paying party under the indemnity principle

– see Butt v Nizami [2006] EWHC 159 (QB) .

However, that does not mean that the costs become the costs of the solicitor rather than the client

– see Cobbett v Wood [1908] 2 KB 420.

Stage I and Stage II costs are described at CPR 45.18 as “the legal representative costs” only to distinguish them from an advocate’s costs. It does not create any exception to the principle referred to in Cobbett v Wood above.

A solicitor cannot on the one hand hold the claimant contractually responsible for all its costs and disbursements, even on a capped basis, and on the other hand assert that the client is not entitled to receive a bill for, or challenge, part of them because they are not his costs.

Here the claimant, that is the client/former client, was represented by Checkmylegalfees.com and the court added this important footnote, which should be read and understood by all of those dealing with Solicitors Act challenges.

Footnote

“61. Ms Moore, the Claimant’s professional adviser, is a Costs Lawyer, that is to say a person regulated by the Costs Lawyer Standards Board and with the right, in cases such as this, to conduct litigation and to exercise a right of audience. In correspondence with the Defendant, she identified herself as such from an early stage and from the outset requested that the Defendant communicate with Checkmylegalfees.com, rather than with the Claimant directly.

62. That seems to me to be consistent with the current provisions of the Solicitors’ Code of Conduct (at chapter 11), which indicate that a solicitor should not contact a party directly where that solicitor is aware that that party has instructed “a lawyer”, defined in the glossary to the Code of Conduct to include “a profession whose members are authorised to carry on legal activities by an approved regulator other than the SRA”.

63. If the Defendant had been any doubt about Ms Moore’s status, a quick check of the public register maintained by the CLSB, and freely available on the Internet, would have confirmed it.

64. The Defendant refused to comply with Ms Moore’s request not to contact the Claimant directly. Its response to Ms Moore’s initial communication was to write directly to the Claimant on the basis that Checkmylegalfees.com is not a firm of solicitors. Even after its file had been released to Checkmylegalfees.com and it had received notice that the Claimant’s application had been filed, the Defendant wrote its letter of 18 February 2018 directly to the Claimant, encouraging him to deal with the Defendant directly.

65. I appreciate that the Defendant may have had some initial concerns about its authority to release papers to Checkmylegalfees.com, but by 18 February 2018 can have been no mistake about the Claimant’s wishes or Ms Moore’s professional status.

66. Whether the Defendant has complied with the Code of Conduct is not a matter for me, but I would offer the view that Ms Moore, when acting as a Costs Lawyer with a right to conduct litigation, is at the least entitled to expect from the Defendant the same professional courtesy as a solicitor would expect. It does not seem to me that she has received it.”