Key Facts
- •Blue Manchester Limited (Claimant) sought assessment of 23 bills from Howard Kennedy LLP (Defendant).
- •Bills 16-23 were already subject to assessment.
- •Bills 1-15 were rendered over 12 months before the claim.
- •The central issue was whether bills 1-15 were interim statute bills under Section 70(3)(a) of the Solicitors Act 1974, and if so, whether special circumstances justified assessment.
- •The Claimant argued the bills were payments on account due to a Conditional Fee Agreement (CFA) with discounted rates and a potential 'top-up' upon winning the arbitration.
- •The Defendant argued the bills were interim statute bills, permitted by the CFA and terms of business, and no special circumstances existed.
- •Significant cost discrepancies existed between initial estimates and final charges.
Legal Principles
A statute bill must be complete and final as regards its subject matter; it cannot be subsequently amended.
Boodia v Richard Slade and Co Solicitors [2018] EWCA Civ 2667; Sprey v Rawlinson Butler LLP [2018] 2 Costs LO 197; Masters v Charles Fussell & Co LLP [2021] EWHC B1 (Costs); Ivanishvili v Signature Litigation LLP [2023] EWHC 2189 (SCCO)
Solicitors must make it plain to clients if bills are intended to be complete and final interim statute bills.
Adams v Al-Malik [2003] EWHC 3232 (QB); Masters v Charles Fussell & Co LLP [2021] EWHC B1 (Costs)
Parties can contract for the right to issue interim statute bills, but the agreement must be clear.
Bari v Rosen [2012] EWHC 1782 (QB); Ivanishvili v Signature Litigation LLP [2023] EWHC 2189 (SCCO)
Outcomes
Bills 1-15 were not interim statute bills.
The CFA and terms of business did not clearly permit interim statute bills, especially considering the discounted rates and potential for a 'top-up' upon winning the arbitration. The bills lacked the necessary finality because the final amount due was contingent on the arbitration outcome. The Defendant’s attempt to claim the benefits of statute-barred bills while reserving the right to amend them was unacceptable.
Special circumstances existed justifying assessment of bills 1-15.
Significant discrepancies between initial cost estimates and final charges, combined with a lack of clear written communication regarding the estimate revisions, warranted further scrutiny through assessment.
Order for Solicitors Act assessment of bills 1-15.
Based on the above findings.