Guest Supplies Intl Limited v Spector Constant & Williams Limited
[2024] EWHC 2450 (SCCO)
Blue Manchester Limited v Howard Kennedy LLP
22 October 2024
[2024] EWHC 2823 (SCCO)
Senior Courts Costs Office
A client challenged 23 solicitor bills. The judge ruled that 15 of the bills, sent more than a year ago, weren't proper 'final' bills because the total cost depended on the case's outcome. The judge also decided that the big differences between initial cost estimates and final bills, and poor communication about these changes, meant the client deserved a thorough review of the bills.
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.