Monthly invoices v’s statutory bills- check the terms of your retainer!
In the case of Ivanishvili v Signature Litigation LLP, the Georgian businessman Claimant started proceedings to obtain a judgment that the 79 invoices issued by their previous Solicitors over a period of more than six years, and worth £12,781,354.66, were not statute bills. If that was right, they argued that all these invoices would be capable of being the subject of a Solicitor/Client Detailed Assessment (as, if deemed statute, they would have fallen foul of the timelines in the Act).
The Claimant argued that they had a Discounted Conditional Fee Agreement with the Defendant firm, so the invoices represented only a partial payment, and a final bill would be issued when the legal claim concluded. Therefore, the current invoices could not be seen as conclusive statute invoices.
On the other hand, the Defendant claimed that their invoices were comprehensive and final bills for the periods covered therein. They argued that only the last invoice, dated October 2022, could be assessed. According to them, the other invoices had been settled, and therefore the Claimant had no grounds to dispute them.
Cost Master Leonard did not conclusively determine if interim statute invoices could be issued under the terms of a CFA. He found the retainer unclear on the allowing of interim statute bills. In this case, he concluded that none of the invoices could be considered statutory bills “because any such agreement would have been inconsistent with the terms of the retainer under which they were issued and paid.”
Additionally, as per the retainer agreement, Master Leonard confirmed that “the invoices could only be finalised when the firm either delivered a bill for any additional fees owed (e.g., a success fee) or when the firm acknowledged that no further payment was due and finalised its billing accordingly. The standard assumption for a contract between a solicitor and their client is that it is a ‘complete contract.’ Therefore, the solicitor is entitled to issue a statutory bill only at the end of the retainer, the completion of the legal transaction, or the conclusion of the litigation. Since these invoices were issued during the course of the litigation rather than at its conclusion, Master Leonard allowed for a Solicitor/Client Detailed Assessment.
The fact that such a position was argued in court, highlights the issues arising from the current statutory position. Most, including the Senior Costs Judge, are lobbying for a replacement statute to the Solicitors Act 1974 (that, on the whole, reflects the wording of even earlier statute) due to the problems faced with the opaque definitions therein of this nature.
Until such a time as replacement statute comes into force, and even assuming that that does not throw up issues of its own, depending on the quality of its drafting, there remains increasing interest in Solicitors Act challenges to solicitor charges and complex debate on client’s rights.
Kain Knight have extensive experience in this area and are available to advise in both ongoing litigation (as to the nature of retainers and interim invoicing) and in conducting Solicitors Act assessment for both firms of solicitors and disputing clients.
The benefit to lawyers of compliant interim statute bills, at the moment, remains that the client’s rights to oppose those are limited by the timelines contained within the existing Act giving a degree of certainty on recovering those fees charged if the timelines have lapsed. The disadvantages of an interim statute invoicing position include that the fees for the periods covered cannot be revisited by the lawyer later. Retainers and invoices rendered should be clear on their intent and it is important to ensure that they are compliant if they are to be relied upon in any subsequent dispute.
