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1 July 2021 0 Comments
Posted in Dispute Resolution, Opinion

Too late to challenge a solicitor’s costs?

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For a client facing a summary judgment application in relation to unpaid solicitor’s costs, the fact that they have lost the opportunity for a Solicitors Act assessment is not necessarily the end of the road.

In the recent case of Devonshires Solicitors LLP v Elbishlawi & Lam Developments Limited [2021] EWHC 173(Comm), Devonshires were seeking summary judgment against former clients.

At the hearing the Defendants argued that the solicitor’s invoices were not “statute bills” because they lacked sufficient information to enable the Defendants to know what they were being charged for, and therefore the solicitors could not sue on the invoices (Section 69(1) of the Solicitors Act 1974). If correct this would be a complete defence to the claim.

 

This argument, however, had not been raised in the Defence, and the Defendants had failed to  serve evidence to oppose Devonshires’ application in time, and so this argument was rejected.

However, Mr Justice Butcher went on to say “I accept Mr. Bailey’s [counsel for the Defendants] submission that, even if the invoices were “statute bills” and even though the period of 12 months specified in S. 70(3) of the 1974 Act had expired without the Defendants having made an application for an assessment under that Section, that does not mean that the Defendants have no entitlement to challenge the sums claims in those invoices.”  The judge referred to the decision in Turner v Palomo [2000] 1 WLR 37 which explained “that a claim by a solicitor for unpaid sums is an unliquidated claim, for payment of a reasonable charge”.  In Turner, Evans LJ had confirmed “We do not see any difficulty in holding that the solicitors claim is for a reasonable sum, whether by statute or at common law”.

Further, Mr Justice Butcher explained with regard to Turner “that the Court of Appeal considered there to be a difference on a summary judgment application between a case in which a gross sum bill has been broken down in a way that allows it to be seen not only what work had been done but also how much time had been spent and the rates charged, and the case where such detail had not been given”. In the former scenario, there would need to be a specific challenge to particular items as the basis to oppose summary judgment. By contrast, where no breakdown was provided, and so where the client can only challenge the reasonableness of the total sum claimed, it may well be appropriate for there to be an assessment of the whole bill.

This is reflected in the White Book, 2020, para. 24.6.3: “On a claim by a solicitor against their former client for non payment of costs, the Court may, if there is no real prospect of defending the claim, give summary judgment for a claim to be determined by means of a detailed assessment … Such an order can be made even if the former client has lost the opportunity to apply for a detailed assessment of the solicitors bill under Part III of the Solicitors Act 1974”.

In the Devonshires case the Judge found that the solicitors had provided a sufficiently detailed breakdown in relation to a number of its invoices, in relation to which summary judgment was ordered. However, in relation to other invoices, where sufficient detail has not been provided, the judge followed Turner and ordered “summary judgment for a sum to be determined on a detailed assessment by a costs judge”.

Significantly, a common law assessment is not subject to the one fifth rule, and therefore the client is likely to pay the costs of the assessment in any event.

In summary, specific assessment issues should therefore be raised in a Defence, or alternatively a client can seek a common law assessment of a gross sum bill if sufficient information has not been provided by the solicitor.

If you have any enquiries, please contact Tim Newcombe from our Dispute Resolution team on:

020 7842 1421     Email ustim.newcombe@roydswithyking.com

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