Costs Judge “baffled” by the professions consistent failure to provide for interim statute bills in retainer documents.

Making sure that your retainer provides clearly for the provision of interim “statute” bills to your clients is really important because the time limits for a client to seek an assessment of a solicitors’ bill under the Solicitors Act 1974 only begin to run once the client has been delivered with a statute bill, and a solicitor can only sue his former client for unpaid costs if the invoice(s) are statute bills, ie a complete and final invoice for a defined period of a client’s instructions, as distinct from a request for payment on account of costs.

It is surprising, therefore, how many solicitors still fail to do this, and the recent case of Stella v. Hodge Jones & Allan LLP [2024] EWHC 1704 (SCCO) is another example.

In this case the issue as to whether the solicitors’ interim bills were statute bills or not was one of a number of issues before the court. Even if he was right about the status of the solicitors’ bills, Mr Stella also needed to persuade the court that “special circumstances” existed to justify an assessment, which he was successful in doing. However, in many cases the issue of whether an interim invoice is an interim statute invoice or not will be the crucial issue in determining whether a former client succeeds in getting their bills assessed by the court.

In the Stella case the billing arrangements in the solicitors’ retainer were found to be ambiguous, and this ambiguity was not overcome by the fact that some of the invoices received by Mr Stella were under cover of a letter which referred to “interim statute bills”. Costs Judge Whalan confirmed: “I am satisfied that on an uncomplicated construction of the retainer in this case, the invoices delivered by the Defendant to the Claimant were interim bills on account and not statute bills …. insofar as it could be argued that the wording of the retainer is ambiguous, any such ambiguity must be resolved in the favour of the Claimant, the paying party”.

Nor was Cost Judge Whalan impressed with the solicitors’ argument that there was an implied agreement that it could render interim statute bills, to include on the basis that Mr Stella had made regular payments on account. He went on to say: “If a solicitor wants to provide for the demand and payment of interim statute bills, then the retainer should express an unequivocal provision to this effect.  The profession’s consistent failure to do so is, frankly, baffling”.

These comments are not surprising given the string of recent cases on this particular issue, which crops up frequently in solicitor and client fee disputes and is a pitfall for unsuspecting solicitors who fail to address this important issue within their retainer documents. The only reliable way to avoid this problem is to ensure that provision for interim statute bills is clearly and unambiguously provided for in your retainer.