Suing your client

Sometimes solicitors and their clients fall out with each other, and sometimes a client refuses to pay the solicitor their charges, expenses and disbursements. This is a sad day, as court proceedings will usually follow.

But it can become a tragic day for the solicitor, if to their horror, the court proceedings are then struck out, and they are ordered to pay the costs of the proceedings to their former client.

Three particular mistakes seem to be made again, and again. First solicitors forget the requirements of section 69 of the Solicitors Act 1974, which requires them not only to wait until one month after a delivery of a bill of costs, but to ensure that their “bill” is actually a valid bill. One that complies with the Act and the common law requirements, and is a statutory bill.

Secondly, their terms of business may be opaque, or at best ambiguous, as to whether they are entitled to deliver interim statutory bills, or whether they are limited to making requests for payment on account, or have rendered a Chamberlain bill. This can matter greatly, if any application is made for a solicitor client assessment under section 70 and a potential time bar has to be considered.

Thirdly, if their retainer is in fact, a contentious business agreement (and there is a school of thought that all conditional fee agreements are contentious business agreements) then they may not sue on it, but first have to make an application to enforce it under section 61 of the Solicitors Act 1974.

Every year, I see these issues arise: and as always, it is far cheaper, easier and more pleasant to anticipate them in advance, than to try to find a solution after the event.