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Iwuanyawu v Ratcliffes Solicitors

View profile for Megan Roxburgh
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In Iwuanyawu v Ratcliffes Solicitors [2020] EWHC B25 (Costs), Master Gordon-Saker found in favour of the Claimant (the client) in a solicitor client dispute regarding the right to have the Defendant’s (the solicitor) bills assessed.

Background

The Defendant provided the Claimant with a total of 14 invoices for services rendered in relation to matrimonial proceedings. The Claimant sought an order for 13 of those invoices to be assessed, the one left undisputed related solely to the court fee for the divorce petition.

At the first hearing on 16 March 2020, Master Gordan-Saker ordered that the 8 most recent invoices would be subject to a detailed assessment as they were delivered less than 12 months following the issuing of proceedings. However, the Defendant argued that the Court had no jurisdiction over the first two invoices (paid more than 12 months prior to proceedings being issued) and that the Claimant would need to establish special circumstances for the latter 4 to be assessed as they had already been paid albeit within 12 months of the commencement of proceedings. The claim was therefore adjourned to allow the Claimant time to provide evidence as to jurisdiction and special circumstances.

The Claimant therefore filed a witness statement and the Defendant filed copies of the client care letter and their standard terms of business.

Decision

Upon consideration of the Defendant’s terms the Master provided:

‘It seems to me that these terms do not enable the Defendants to submit interim statute bills. The client care letter entitled the Defendants to invoice monthly but it was not provided expressly that such invoices would be final bills for the periods that they covered.

The Defendants were entitled to deliver monthly invoices “for our charges and disbursements” but there was nothing agreed to the effect that such invoices should be self-contained bills which were final for the periods that they covered and that any challenge would therefore be subject to the technical rules and time limits of section 70.’

He found that there was confusion around the wording in the client care letter referring to monthly invoices, but the Defendant’s standard terms referring to bills. He went on to say that there was no evidence that the Claimant had any understanding of the law concerning solicitors bills and that:

‘if a solicitor wishes to reserve a right to deliver interim statute bills which are intended to be final for the periods that they cover, as opposed to requests for payment on account, that right must be spelled out clearly in the contract with the client. In this case it was not.’

Following this finding the Defendant sought to rely on the case of Vlamaki v Sookias & Sookias wherein the Claimant was faced with the issue that if the invoices are not interim statute bills, then they can have no right to assessment. However, the Master disagreed and found the present case to be more similar to Chamberlain v Boodle & King [1982] 1 WLR 1443; wherein it was found that:

‘the bills “should be regarded as one bill in respect of one complete piece of work, although divided into parts”. As the claimant had demanded taxation of the last within one month, he was entitled to have the whole of it taxed.’

Conclusion

Master Gordon-Saker therefore concluded that:

in most cases it will be unrealistic to expect a client to be able to challenge her own solicitors’ bills in the middle of matrimonial proceedings.

Accordingly, in my judgment, the 14 bills delivered by the Defendants were not interim statute bills but were part of a running account which should be regarded as one bill delivered on the date of the last, namely 18th October 2019 when the Defendants’ retainer was determined. That bill has not been paid and is dated within 12 months of the issue of proceedings. There is therefore no need for the Claimant to show special circumstances.

Accordingly the profit costs claimed in the bill, comprising the 14 invoices rendered by the Defendants, should be the subject of detailed assessment.’

In Newman v Gordon Dadds LLP [2020] EWHC B23 (Costs) Master Leonard was ruling on the preliminary issue of whether a solicitor should be limited to only recover costs for services rendered in line with a previously provided estimate.

Decision

The Master found that the Defendant had failed to provide any estimates save for one provided in August 2017 for £10,000 for work intended to lead to settlement of a corporate/family dispute without litigation. In doing so the Defendant was:

‘in breach of its contractual and professional obligations and deprived the Claimant of the opportunity to make an informed choice as to whether to seek alternative, less expensive representation for the litigation that followed.

There might well be a case for limiting the costs recoverable by the Defendant between January and May 2018 to the likely expenditure that the Claimant would have incurred on choosing another solicitor to represent him in that litigation. The evidence produced by the Claimant however is not sufficient to identify a reliable and fair figure.

For those reasons, it seems to me that would be wrong for me to conclude, on Mastercigars principles, that the costs that the Defendant can reasonably recover from the Claimant should be limited to any specific figure.’

 

Opinion

It is clear that any solicitor failing to explain, at the commencement of any fee agreement, how they will be billed and the requirements/rules around a client’s rights to challenge any fees rendered will not be looked upon favourably by the court. It seems entirely logical that it is the responsibility of the legal professional to ensure that their client understands the processes that befall them. 

With regards to the second case, it may be that in this instance the solicitor was not limited to its estimate, however, providing clients with key information such as their likely liability with regards to legal costs should not be an optional extra but an essential component of the services provided to that client.

 

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