I have thought increasingly frequently in the last couple of years, about writing a book on solicitor-own client disputes a particularly interesting area of costs work, and uniquely painful for the solicitors who find themselves embroiled in a vulgar dispute with their own client about their fees.
Most solicitors never escalate a dispute with their client about their fees and many clients are reluctant to embark upon the uncertainties of a solicitor -own client assessment : if queries are raised, then a deal is usually struck which both sides are prepared to live with.
But sometimes it happens, and what has emerged in several solicitor-own client disputes I have seen in the last year, is the failure of the solicitors firms in question to appreciate the need to send their client a proper bill that complies with the formalities of the Solicitors Act 1974, or even to appreciate whether they are asking their client for monies on account, or sending an interim statute bill.
Most firms send their clients short form invoices. But are those invoices interim statute bills or invoices for payments on account? The question whether a bill is to be regarded as an interim statute bill or an invoice for payment on account is always an issue of fact in respect of each case.
The starting point is always the retainer which will often expressly state whether an interim invoice is to be regarded as an interim invoice on account or an interim statute bill. Assuming that the bill is a proper statute bill, a danger lurks in the 1974 Act, in that if the bill fails to comply with the provisions of the Act, then no bill for the purposes of the Act has been delivered and any action on it is likely to be a nullity.
Section 69 (1) of the Solicitors Act 1974 precludes any action from being brought to recover any cost due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered in accordance with the requirements mentioned in subsection (2).
Those requirements are that the bill must have been signed in accordance with section 69 (2A) and must’ve been delivered in accordance with section 69 (2C) in that it was delivered to the party to be charged the bill personally, or was delivered to that party by being sent to him by post to or left him at his place of business dwellinghouse or last known place of abode or it was delivered to that party by means of an electronic communications network.
The difficulty with some bills that I see is whether the bills contain a “sufficiency of narrative” to be statute bills, which is not a statutory requirement per se but rather a requirement that the courts have constructed when looking at section 69 and its predecessor statutory section.
In Carter Ruck (a firm).v.Mireskandari  EWHC 24 (QB) Mrs Justice Swift comments on some of the earlier authorities. The crucial point to note is that she applied a test formulated originally by Lord Justice Ward where he explained that the burden on the client under section 69 (2E) of the 1974 act to establish that a bill for a gross sum in contentious business is not a bill bona fide complying with the Solicitors Act 1974 is satisfied if the client shows that there is no sufficient narrative in the bill to identify what it is his being charged for and that he does not have sufficient knowledge from other documents in his possession or from what he has been told reasonably to take advice whether or not reply that bill to be taxed.
The classic example of an insufficient narrative is something like “For professional services supplied”.
But on the authorities, the deficiencies in the narrative could probably be satisfied by setting out what documents the client has and what he was told to show that he did know sufficient about the incurrence of fees, whether or not to apply for the bill to be taxed. In this scenario, a set of explanatory letters and good quality attendance notes will be crucial.