Court of Appeal Landmark Decision of Solicitors Act Bills


Simon Browne QC, instructed by Richard Slade & Co, succeeded in persuading the Court of Appeal (Newey LJ, Coulson LJ and Haddon-Cave LJ) that Slade J of the High Court was wrong to hold that to qualify as an interim statute bill, a bill must include both profit costs and disbursements in respect of the period to which it covers.

An interim statute bill under the Solicitors Act 1974 must be (1) signed, (2) delivered, (3) complete and self-contained, and (4) have sufficient narrative. Costs Judge Master James held in the first instance and Mrs Justice Slade of the High Court on appeal, that by billing disbursements at a later date to the monthly profit cost bills (a practice provided for in the solicitor-client retainer), the monthly bills could not be considered “complete and self-contained”. As payments on account as opposed to interim statute bills, the time for the client to apply for assessment did not start to run until the rendering of the final bill. The 12 month period had not yet expired and therefore the clients were entitled to apply for assessment of each of the bills rendered by the firm over a period of several years.

The Appellant firm appealed both judgments of the lower courts, contending that a bill for profit costs or disbursements alone can constitute an interim statute bill within the meaning of the Act. Time to request assessment of the monthly bills had therefore expired.

In determining the application, the Court of Appeal considered the wording of the 1974 Act, the case of Bari v Rosen, and issues pertaining to practicality and policy.

The Court of Appeal unanimously held that the 1974 Act says nothing about whether a bill must, or must not, include both profit costs and disbursements to constitute an interim statute bill. The fact that the Act defines “costs” as including “fees, charges, disbursements, expenses and remuneration” gives no indication as to whether each must be billed together.

The Court further held that Slade J of the High Court had misunderstood the meaning of the phrase “complete self-contained bill of costs” used in the case of Bari v Rosen [2012] 5 Costs LR 851. The phrase had first been used by Roskill LJ (as he then was) in the Case of Davidsons (a Firm) v Jones – Fenleigh [1980] CA Costs LR 70. Bari itself was not concerned with the issue of whether an interim statute bill had to include both profit costs and disbursements. Rather, the point being made was that to constitute a statute bill it must be apparent to both parties that the sum in question is final in the sense that it cannot be revisited or revised – in other words, the bill goes beyond a request for payment on account. It was erroneous to hold Bari as authority for the position that all costs relating to the relevant period must be included for it to be considered a “complete and self-contained” bill.

In the Courts below the Court had been informed that there was no authority on the point. Simon Browne QC, for the Appellant on appeal but not in the courts below, relied upon the case of Aaron v Okoye [1998] CA 6 Costs LR 2 which had not been cited to either the Costs Judge or the High Court Judge. The Court of Appeal agreed with the Appellant’s argument that Aaron is inconsistent with the case being put forward by the Respondent that profit costs and disbursements in one time period must be billed together.

Finally the Court considered the practical implications of requiring solicitors to include all disbursements incurred during the relevant billing period of profit costs bills. The court held that the approach taken in the lower courts would have unsatisfactory implications: “A solicitor could not, it seems, raise a statute bill until he had himself been invoiced for all disbursements incurred during the relevant period, leaving the solicitor dependent on the cooperation of third parties.” Allowing separate billing of disbursements and profit costs as interim statute bills is paramount to providing both parties with finality.

2018-11-28T10:05:48+00:00 November 27th, 2018|News|0 Comments

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