Richard John Slade (trading as Richard Slade and Company) v Jugmohan Boodia
| Jurisdiction | England & Wales |
| Judge | Lord Justice Coulson,Lord Justice Newey,Lord Justice Haddon-Cave |
| Judgment Date | 27 November 2018 |
| Neutral Citation | [2018] EWCA Civ 2667 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2017/3146 |
| Date | 27 November 2018 |
[2018] EWCA Civ 2667
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mrs Justice Slade
Royal Courts of Justice Strand, London, WC2A 2LL
Lord Justice Newey
Lord Justice Coulson
and
Lord Justice Haddon-Cave
Case No: A2/2017/3146
Mr Simon Browne QC (instructed by Richard Slade and Company plc) for the Appellant
Mr Mark Friston (instructed by W Davies Solicitors, Woking) for the Respondents
Hearing date: 8 November 2018
Approved Judgment
Introduction
Not every bill that a solicitor renders to his client is a “statute bill”. A “statute bill” is one complying with the Solicitors Act 1974. Where a solicitor has delivered such a bill to his client, he can potentially sue on it, but he cannot subsequently charge any more for the work in question and, subject to certain time limits, the client can ask for the bill to be assessed by the Court under section 70 of the Act. Depending on the terms of the retainer, a solicitor may be able to raise statute bills during the course of a retainer as well as when he has completed the task on which he has been instructed, but interim bills may, alternatively, represent requests for payments on account. If that is the case, the time limits on applications for assessment do not bite and the solicitor cannot bring proceedings to recover his fees. On the other hand, it may be open to the solicitor subsequently to increase the amounts claimed and also to terminate the retainer if a bill is not paid.
The issue in the present case is whether bills that the appellant's firm, Richard Slade and Company, delivered to the respondents, Mr and Mrs Boodia, were all statute bills (as the appellant contends) or constituted a series of on account bills culminating in a final statute bill (as the Boodias suggest). Slade J, upholding Master James, Costs Judge, decided in favour of Mr and Mrs Boodia on the basis that an interim statute bill must be a complete and final account of the fees sought for the period covered by it and, hence, must encompass both profit costs and disbursements. The appellant argues otherwise.
Narrative
The appellant acted for Mr and Mrs Boodia between 2013 and 2016 in connection with a dispute relating to a right of way. The retainer, which Mr and Mrs Boodia signed on 30 January 2013, included this under the heading “Payment Terms”:
“Bills are rendered monthly in arrears. Our bills are detailed bills and are final in respect of the period to which they relate, save that disbursements (costs and expenses which we incur on your behalf) are normally billed separately and later than the bill for our fees in respect of the same period. Please do not assume, therefore, from a bill for our fees which does not refer to any disbursements that no disbursements were incurred during the period. The more usual situation is that disbursements will have been incurred and will be billed separately.”
By October 2016, when Mr and Mrs Boodia terminated the retainer and instructed alternative solicitors, the appellant had delivered 61 invoices to the Boodias. 43 of these were devoted exclusively to profit costs and the other 18 only to disbursements. In total, Mr and Mrs Boodia were billed £207,609.46, comprising £141,287.70 (plus VAT) for profit costs and £31,703.80 (plus VAT) for counsel's fees and other disbursements. Payment of the final four invoices has been withheld, but the amounts claimed in the earlier invoices were paid.
On 17 November 2016, Mr and Mrs Boodia issued a claim form in which they asked for all the bills they had received to be assessed in accordance with section 70 of the 1974 Act. Having regard to the time limits contained in that section, Master James directed a hearing to determine the following preliminary issue:
“whether, by virtue of them being final for the period covered by them only insofar as they relate to profit costs, the bills raised by the Defendant to the Claimants as set out in the claim form constitute interim statute bills under Part III of the Solicitors Act 1974, and if they are not such interim statute bills whether they are capable of being treated as a series of on account bills culminating in a statute bill dated as per the last in the series”.
The matter came before Master James on 17 March 2017. She concluded that the various bills that the appellant had rendered constituted “a series of on account bills culminating with a final statute bill dated 6 th October 2016” and that the date of delivery for all the invoices was the date of delivery of that final bill. On that basis, she ordered a detailed assessment of all the bills. Master James rejected the appellant's contention that the invoices represented “interim statute bills”, explaining (at paragraph 3 of her judgment):
“you cannot in my view have an interim statute bill and then come back at a later stage and say, ‘Here is something else to go into that bill.’ It is either a final bill for the period that it covers or it is not.”
The appellant appealed, but without success. The appeal was dismissed by Slade J on 31 October 2016. Slade J considered that Master James had been right to hold that the bills raised by the appellant were not statute bills (see [2017] EWHC 2699 (QB), [2018] 1 WLR 2037).
The legal framework in greater detail
Section 70 of the 1974 Act, pursuant to which Mr and Mrs Boodia have brought their proceedings, provides as follows:
“(1) Where before the expiration of one month from the delivery of a solicitor's bill an application is made by the party chargeable with the bill, the High Court shall, without requiring any sum to be paid into court, order that the bill be assessed and that no action be commenced on the bill until the assessment is completed.
(2) Where no such application is made before the expiration of the period mentioned in subsection (1), then, on an application being made by the solicitor or, subject to subsections (3) and (4), by the party chargeable with the bill, the court may on such terms, if any, as it thinks fit (not being terms as to the costs of the assessment), order—
(a) that the bill be assessed; and
(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the assessment is completed.
(3) Where an application under subsection (2) is made by the party chargeable with the bill—
(a) after the expiration of 12 months from the delivery of the bill, or
(b) after a judgment has been obtained for the recovery of the costs covered by the bill, or
(c) after the bill has been paid, but before the expiration of 12 months from the payment of the bill,
no order shall be made except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the assessment as the court may think fit.
(4) The power to order assessment conferred by subsection (2) shall not be exercisable on an application made by the party chargeable with the bill after the expiration of 12 months from the payment of the bill.
(5) An order for the assessment of a bill made on an application under this section by the party chargeable with the bill shall, if he so requests, be an order for the assessment of the profit costs covered by the bill.
(6) Subject to subsection (5), the court may under this section order the assessment of all the costs, or of the profit costs, or of the costs other than profit costs and, where part of the costs is not to be assessed, may allow an action to be commenced or to be continued for that part of the costs.
…
(9) Unless—
(a) the order for assessment was made on the application of the solicitor and the party chargeable does not attend the assessment, or
(b) the order for assessment or an order under subsection (10) otherwise provides,
the costs of an assessment shall be paid according to the event of the assessment, that is to say, if the amount of the bill is reduced by one fifth, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs.
…
(12) In this section ‘profit costs’ means costs other than counsel's fees or costs paid or payable in the discharge of a liability incurred by the solicitor on behalf of the party chargeable, and the reference in subsection (9) to the fraction of the amount of the reduction in the bill shall be taken, where the assessment concerns only part of the costs covered by the bill, as a reference to that fraction of the amount of those costs which is being assessed.”
A client thus has an unqualified right to require a bill to be assessed for a month after its delivery. After that, he can still ask for assessment to be ordered, but “special circumstances” will need to be shown if more than 12 months have passed since the bill was delivered, a judgment has been obtained in respect of the bill or the bill has been paid. Where, moreover, upwards of 12 months have elapsed since payment, no order for assessment can be made (see section 70(4)). As for the costs of an assessment, the client can expect to recover his costs from the solicitor if the amount billed is reduced by a fifth, but will otherwise normally have to bear the solicitor's costs.
Section 70 of the 1974 Act largely reflects much older legislation. As Ward LJ explained in Ralph Hume Garry v Gwillim [2002] EWCA Civ 1500, [2003] 1 WLR 510 (at paragraph 19), there is, more generally, “a marked similarity in the substance of the provisions of the [Solicitors Act 1843] and the 1974 Act”.
Several further provisions of the 1974 Act are noteworthy in the context of the submissions addressed to us. In the first place, section 65 allows a solicitor instructed on contentious business to withdraw...
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