This is an ongoing issue and one that crops up on a lot of cases that we see come through our doors.
In the first instance, in Sprey v Rawlison Butler LLP [2018] EWHC 354 (QB) Master Rowley found that the monthly bills delivered to a client by his Solicitor under a discounted CFA were statute Bills. As a result, the client lost the right to seek a detailed assessment of some of those bills.
On Appeal, Mr Justice Nicklin, sitting with Senior Costs Judge Gordon-Saker, said he did not agree that the CFA allowed for monthly statute bills
When examining the CFA it appeared that Paragraph 4.3 said: “Rawlison Butler LLP will bill the Client at the Discounted Rates on a regular (usually monthly) basis, together with any Disbursements as and when incurred. All such invoices are payable by the Client upon delivery. The amounts billed in this way will be payable by the Client regardless of the outcome of the Claim.”
Clause 11.1 said:
“The Client has the right to an assessment by the court of the amount of the fees, Success Fee and/or Disbursements which are payable by the Client under this Agreement, by making an application under section 70 of the Solicitors Act 1974…”
Nicklin J said:
“In my judgment, clause 4.3 is neutral as to whether the 40% invoices were statute bills or not. The agreement to pay at the 40% rate is equally consistent with the appellant making payments on account at that rate. I am satisfied, however, clause 11.1 gives a clear indication that the 40% invoices submitted by the respondent were not statute bills.”
As the Success fee only became payable once a case was “won”,
“unless the three billable items referred to in this clause are read disjunctively, the right to challenge those items arose only at the end of the case. That would mean that the interim bills were not statute bills but requests for payment on account or (more likely in the circumstances) Chamberlain bills”.
Furthermore, he went on to state that
“At the heart of an assessment is whether the sum charged by the solicitors to the client is reasonable. The charge for work done at 40% of the normal rates might well be reasonable, but at 100% not reasonable. A client would not know until the end of the claim (or earlier termination) at which rate he was being charged. On construction of the CFA, the appellant progressively lost the right to challenge the bills as the claim went on.”
This therefore carves the path for receiving party’s to ensure that the Bill of Costs presented to the paying party do indeed accurately reflect the position concerning the statute/interim invoices presented to the receiving party throughout the duration of the Claim, particularly where the case is funded through a CFA.