Solicitors and their bills

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 [2011] 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.

6 thoughts on “Solicitors and their bills

  1. My advise to Solicitors is as soon as they are aware of a problem with the client and payment of their bill they should have a proper bill prepared in the form of a bill for detailed assessment so that it is clearly visible to everyone how the costs have been calculated; over what periods the work has been undertaken; where a discount has been applied and what has been paid on account. If they do this there can then be no criticism from anyone.

  2. One of the questions that has vexed me is whether money recovered as costs can be transferred from client to office without delivering a bill to the client (or other paying party) that is only on an internal bill AND who is the other paying party contemplated by the SAR?

  3. We deliver a full Precedent P bill on every sol/client matter. It saves any technical arguments or having to re-draft on request. The issue of whether the retainer is a contentious business agreement or not still confuses most costs practitioners I speak to!

  4. Hi

    I have received a very high bill for the administration of my Mothers estate. The bill is £40 and there are x2 beneficiaries. The amount he has revived on his bill was £10k and the other beneficiary has only agreed to pay him £12k. I have also tried to complain to the legal ombudsman who ruled in his favour for a bill reduction of £1.5k. my solicitor give me this reduction on hearing I was unhappy and that I was writing to the legal ombusman. I hasten to add he is also charging interest.

  5. Hi

    I have received a very high bill for the administration of my Mother’s estate. The bill is £40k and their are x2 beneficiaries. The amount he has already received on his bill was £10k but the other beneficiary has only agreed to pay him £12k. I have also tried to complain to the legal ombudsman who ruled in his favour for a bill reduction of £1.5k. My solicitor gave me this reduction on hearing I was unhappy with his bill and that I was writing to the legal ombusman. I hasten to add he is also charging interest.

    Reply

    • Interest is statutory Ben. I would seek the input of a costs lawyer or direct access barrister ASAP, as time really is of the essence when faced with a legal bill.

Leave a Reply

Your email address will not be published. Required fields are marked *