Ashfakul Bari (Claimant v Arnold Rosen (T/A Ra Rosen and Company Solicitors) (Defendant
| Jurisdiction | England & Wales |
| Judge | Mr Justice Spencer |
| Judgment Date | 28 June 2012 |
| Neutral Citation | [2012] EWHC 1782 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB/2011/0617 |
| Date | 28 June 2012 |
[2012] EWHC 1782 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
On Appeal from Master Leonard
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Spencer
(Sitting with Master Simons and Mr Greg Cox as Assessors)
Case No: QB/2011/0617
James Holmes-Milner (instructed by Sarah Wootton Solicitors) for the Claimant
Dr Mark Friston (instructed by RA Rosen and Co) for the Defendant
Hearing date: 25 th May 2012
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction and issues
This is an appeal against an order of Master Leonard dated 1 st November 2011 in proceedings between a solicitor (the defendant) and his client (the claimant) in which the client seeks a detailed assessment of the solicitor's bills for work carried out on the client's behalf.
The appeal turns essentially on three issues. The first issue is whether the Master was entitled to conclude that the solicitor's retainer did not permit him to issue interim statute bills to his client. The second issue is whether, in that event, the Master was entitled to conclude that those bills could nevertheless properly be treated as a series of bills culminating in a final statute bill, so that all the bills could be the subject of detailed assessment. The third issue is whether the Master was entitled to find that there were special circumstances to justify detailed assessment of the final bill (and series of bills) outside the 12 month time limit prescribed by the Solicitors Act 1974.
I should say at the outset that the appeal raises no point of general principle but turns entirely on its unusual facts. I heard the appeal, sitting with my assessors Master Simons and Mr Greg Cox, on 25 th May 2012 and reserved judgment.
We were assisted by detailed written and oral submissions from counsel, Dr Friston on behalf of the defendant and Mr Holmes-Milner on behalf of the claimant. By agreement, they provided further written submissions following the hearing. Despite the mass of factual detail, in the end the resolution of the three issues I have identified does not require a minute examination of all the material before me, although it has all been taken into account.
I remind myself that this appeal is limited by CPR52.11 to a review of the decision of the Master and that the test I must apply, in deciding whether to allow the appeal, is whether, following that review, the Master's decision on any of these three issues has been shown to be wrong.
Factual background
In outline the factual background can be briefly stated. Between about April 2008 and December 2009 the defendant, who is a sole practitioner, advised and acted for the claimant, a businessman with corporate interests. It is common ground that he did so under a general retainer, although there were at the outset three specific matters to be dealt with. One was a contemplated claim to remove a liquidator. Another was a potential dispute about a corporate indemnity. The third was an action for negligence against solicitors and counsel who had previously acted for the claimant (for convenience referred to as "the MRP claim", those being the initials of the firm of solicitors).
The crucial document is the retainer letter prepared by the solicitor dated 31 st May 2008, countersigned by the client. I shall return to the key paragraphs of that letter shortly. It is also common ground that the original retainer, covering the three matters, was amended and expanded to cover a number of other miscellaneous matters, some contentious, some non-contentious.
Between 5 th June 2008 and 3 rd March 2009 the defendant rendered a series of bills to the claimant. According to the claimant's amended particulars of claim there were twelve such bills, totalling £37,857.75. All these bills were paid very promptly, pursuant to an express term in the retainer letter that the client must pay each bill by return.
Some six months after the last of these bills was paid, the parties fell out. On 7 th December 2009 the claimant confirmed that he no longer wished the defendant to represent him. The MRP claim was still proceeding. The claimant made proposals for payment of the defendant's outstanding costs but no agreement could be reached. Matters came to a head when the defendant sought outstanding costs of £12,900 plus disbursements and VAT, and excercised his lien over documentation pending payment. The defendant's final bill dated 22 nd January 2010 was for £15,987.50. On payment (under protest) of that sum, the relevant papers were released.
Another solicitor, Sarah Wootton, has since acted for the claimant. She endeavoured to settle the MRP claim but had difficultly identifying the relevant costs the claimant had incurred to the defendant as his solicitor in the litigation. The MRP claim was eventually settled, with MRP agreeing to pay the claimant's costs. When Miss Wootton referred the matter to a costs draftsmen she was advised that the papers available did not justify the costs which the claimant was seeking against MRP. It was said that the defendant's records were in disarray, lacking in attendance notes or any formal time record.
In order once again to bring matters to a head, on the advice of Miss Wootton the claimant issued a Part 8 claim for detailed assessment of the final bill of costs dated 22 nd January 2010. That application was issued on 20 th January 2011, just two days within the expiry of twelve months from the date of the bill. It is common ground that the final bill was, or fell to be treated as, a final statute bill in respect of which the claimant was entitled to detailed assessment pursuant to the provisions of section 70(3) of the Solicitors Act 1974, provided the court was satisfied that there were "special circumstances".
It unnecessary to recite the procedural stages which followed. Suffice it to say that the claimant applied on 29 th June 2011 to amend the particulars of claim to incorporate all the previous bills rendered by the defendant to the claimant from June 2008 onwards. Thus the application before the Master, which he heard on 22 nd July 2011, was an application for permission to amend the particulars of claim to embrace detailed assessment of the earlier bills as well.
The relevant legal principles
The relevant principles of law and practice governing the issue and assessment of solicitors' bills of costs may be summarised as follows for present purposes. Where a solicitor issues to his client a bill of costs which complies with the requirements of the Solicitors Act 1974 it is known colloquially as a "statute bill". Section 70 (1) of the Act gives the client the right, within one month of delivery of the bill, to apply to the High Court for the bill to be assessed, without requiring any sum to be paid into court. If no such application is made, the absolute right to assessment is lost. However, if a statute bill has not been paid and the client applies to the High Court for assessment of the bill within twelve months from delivery of the bill, the combined effect of section 70 (2) and (3) is that the High Court may allow assessment (and I am advised by my assessors usually does allow assessment), on such terms as the court thinks fit. If the bill remains unpaid and 12 months have expired from delivery of the bill, the court may only order an assessment if special circumstances are shown.
The position after a statute bill has been paid is somewhat different. The client still has the absolute right to an assessment before the expiry of one month from delivery of the bill. After that, but only up to 12 months from the date of payment, if the client applies for assessment, special circumstances need to be shown. No assessment at all can be ordered after the expiration of 12 months from payment. Section 70(4) creates an absolute bar. For completeness I should mention that there are additional provisions where the solicitor has obtained judgment on the bill, but this does not arise in the present case.
The basic principle is that a solicitor's retainer is normally an entire contract under which the solicitor is entitled to claim remuneration only when all the work has been completed or the retainer has been terminated. A solicitor is not entitled generally to any payment on account of his costs other than disbursements. However, a solicitor may contract with his client for the right to issue statute bills from time to time during the currency of the retainer. Such bills are known as "interim statute bills". They are nevertheless final bills in respect of the work they cover, in that there can be no subsequent adjustment in the light of the outcome of the business. They are complete self-contained bills of costs to date.
Interim statute bills issued during the currency of the retainer can arise in only two ways: by agreement, as already explained, or by natural break, i.e. at a natural break in protracted litigation or other work. It is common ground that none of the bills in the present case was issued at a natural break in the work conducted by the solicitor for the client. The defendant's case is that he had a contractual entitlement to issue interim statute bills because of the terms of the retainer.
Even if there was a contractual right to issue interim statute bills, it would be a question of fact whether any individual bill issued to the client was a statute bill. If there was no contractual entitlement to issue an interim statute bill, any interim bill issued could be no more than a request for payment on...
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