Guest Supplies Intl Limited v Spector Constant & Williams Limited
[2024] EWHC 2450 (SCCO)
Oakwood Solicitors Ltd v Menzies
23 October 2024
[2024] UKSC 34
Supreme Court
A solicitor deducted fees from a client's compensation. The client wanted the bill assessed, but the solicitor said it was too late because the fees were 'paid'. The Supreme Court decided that 'paid' means the client actually agreed to the exact amount deducted, not just that they agreed to deductions in general. So, the client gets their bill assessed.
Key Facts
- •Oakwood Solicitors Ltd (Respondent) deducted fees from client Menzies' (Appellant) compensation following a road traffic accident.
- •Menzies applied for assessment of the bill of costs under section 70 of the Solicitors Act 1974 after the 12-month period.
- •The Solicitors Act 1974 governs the assessment of solicitors' bills, with different timelines depending on whether the bill has been 'paid'.
- •The dispute centered on the definition of 'payment' in section 70(4) of the 1974 Act.
- •The Court of Appeal held that deduction of fees with prior client agreement constituted 'payment', while Bourne J held that agreement to the specific amount was required.
Legal Principles
The court has powers to assess solicitors' bills to ensure reasonable remuneration.
Long-standing court powers
Section 70 of the Solicitors Act 1974 governs the right to apply for assessment of a solicitor's bill, with varying time limits depending on whether the bill has been paid.
Solicitors Act 1974, section 70
The meaning of 'payment' in section 70(4) depends on context and the purpose of the statutory provisions.
Statutory Interpretation
'Payment' requires a transfer of money (or equivalent) in satisfaction of a bill with the payer's knowledge and consent.
Court of Appeal interpretation
For payment by deduction or retention, there needs to be a 'settlement of account' – agreement on the sum to be paid.
Established case law interpretation
Outcomes
The Supreme Court allowed the appeal and restored Bourne J's order for an assessment.
The Supreme Court found that 'payment' under section 70(4) requires agreement on the specific amount deducted, not merely prior authorization for deduction. The Court emphasized the need for client protection and the opportunity to review the bill before payment.
Court of Appeal allowed the Solicitors' appeal.
Held that client agreement to deduction of fees under the CFA and delivery of a compliant bill constituted 'payment'. No further agreement to the specific amount was needed.
Bourne J allowed the Client's appeal.
Held that there had been no payment because there was no 'sufficient settlement of account' between the Client and the Solicitors.
Costs Judge Rowley held that the claim was statute-barred.
Held that payment occurred more than 12 months before the application for assessment, based on the delivery of the Final Statute Bill.