Kerry Underwood

SOLICITORS ACT: STATUTE BILL NEED NOT INCLUDE DISBURSEMENTS

leave a comment »


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Slade (t/a Richard Slade And Company) v Boodia & Anor [2018] EWCA Civ 2667 (27 November 2018)

the Court of Appeal held that a solicitor’s invoice could be an interim statute bill for the relevant period, even though it did not contain the disbursements incurred during that period.

“Interim” is a confusing term as an interim solicitor’s bill is in fact a final bill for that period.

Overturning a High Court judgment, the Court of Appeal held that the Solicitors Act 1974 did not require a statute bill to include both the costs and the disbursements and there was no case law justifying such a rule, nor any reasons of practicality or public policy.

On the contrary, practicality required that solicitors should be able to raise costs- only bills, as having to include all disbursements incurred during the relevant period would leave solicitors dependent upon third parties, such as experts and counsel, to raise invoices.

 

“The difficulties would be the greater if work were being undertaken (say by counsel or an expert) at the end of a solicitor’s billing period. The solicitor would, presumably, be unable to render a statute bill until he knew the cost of work done up to midnight on the final day, and, where work continued into the next billing period, an apportionment might be required.

 

“Separate billing for profit costs and disbursements is common with modern, digital billing, and I do not accept that that need give rise to problems.”
The main reason why the distinction is so important is that the delivery of a statute bill starts the limitation clock ticking in relation to a challenge by the client under the Solicitors Act 1974, whereas an interim bill on account does not.

 

The fact that the Solicitors Act 1974 defines “costs” as including “fees, charges, disbursements, expenses and remuneration” did not mean that they must all be billed together.

 

Here, the retainer allowed for interim statute bills covering costs and not disbursements to be delivered.

 

The lower court had failed to consider the decision of the Court of Appeal in

 

Aaron v Okoye [1998] 2 Costs LR6

 

where the Court of Appeal had said:

 

“If the matter is something which cannot be included in the first bill then the solicitor cannot be criticised for omitting it from the first bill. Indeed, it would be wrong for him to include it. If one is to draw the conclusion that he should therefore be thereafter totally debarred from recovering what otherwise would be a perfectly proper fee for disbursement, that is an unacceptable and unreasonable conclusion which is not necessitated by the premise on which one is proceeding. But, in any event, this is not a case where the paying party, the client, was in any way deceived. The first bill made it clear that counsel’s fees were not being included and a covering letter adequately reminded her of the reason why that was so. So she was not deceived. She was not led astray in any way and there is no general principle which precludes the solicitor from then including the relevant item in a later bill when it is proper for him to do so.”

 

The Court of Appeal said that that judgment was inconsistent with the general principle that profit costs and disbursements cannot be billed separately.

 

Consequently a bill can be a statute bill even though it only includes profit costs, or disbursements, and not both, for the period it covers.

 

Comment

A sensible and correct decision.

What the judgment does not deal with is the issue of No-Win Lower-Fee Conditional Fee Agreements and whether the solicitor can charge the lower-fee element, payable whatever the result of the case, as an interim statute bill as the case progresses.

 

In

Sprey v Rawlison Butler LLP [2018] EWHC 354 (QB) (26 February 2018)

 

the court held that monthly bills delivered by a solicitor to her or his client under a discounted Conditional Fee Agreement could not be statute bills within the meaning of the Solicitors Act 1974.

It may be that that decision should be revisited following the decision of the Court of Appeal in this case.

 

Advertisements

Written by kerryunderwood

January 15, 2019 at 6:49 am

Posted in Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: