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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Slade (t/a Richard Slade And Company) v Boodia & Anor [2018] EWCA Civ 2667 (27 November 2018) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2018/2667.html Cite as: [2018] WLR(D) 725, [2018] EWCA Civ 2667, [2018] 5 Costs LR 1185, [2019] 1 WLR 1126 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mrs Justice Slade
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE COULSON
and
LORD JUSTICE HADDON-CAVE
____________________
RICHARD JOHN SLADE (trading as RICHARD SLADE AND COMPANY) |
Appellant |
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- and - |
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(1) JUGMOHAN BOODIA (2) DEORANEE BOODIA |
Respondents |
____________________
Mr Mark Friston (instructed by W Davies Solicitors, Woking) for the Respondents
Hearing date: 8 November 2018
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Crown Copyright ©
Lord Justice Newey:
Introduction
Narrative
"Bills are rendered monthly in arrears. Our bills are detailed bills and are final in respect of the period to which they relate, save that disbursements (costs and expenses which we incur on your behalf) are normally billed separately and later than the bill for our fees in respect of the same period. Please do not assume, therefore, from a bill for our fees which does not refer to any disbursements that no disbursements were incurred during the period. The more usual situation is that disbursements will have been incurred and will be billed separately."
"whether, by virtue of them being final for the period covered by them only insofar as they relate to profit costs, the bills raised by the Defendant to the Claimants as set out in the claim form constitute interim statute bills under Part III of the Solicitors Act 1974, and if they are not such interim statute bills whether they are capable of being treated as a series of on account bills culminating in a statute bill dated as per the last in the series".
"you cannot in my view have an interim statute bill and then come back at a later stage and say, 'Here is something else to go into that bill.' It is either a final bill for the period that it covers or it is not."
The legal framework in greater detail
"(1) Where before the expiration of one month from the delivery of a solicitor's bill an application is made by the party chargeable with the bill, the High Court shall, without requiring any sum to be paid into court, order that the bill be assessed and that no action be commenced on the bill until the assessment is completed.
(2) Where no such application is made before the expiration of the period mentioned in subsection (1), then, on an application being made by the solicitor or, subject to subsections (3) and (4), by the party chargeable with the bill, the court may on such terms, if any, as it thinks fit (not being terms as to the costs of the assessment), order—
(a) that the bill be assessed; and
(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the assessment is completed.
(3) Where an application under subsection (2) is made by the party chargeable with the bill—
(a) after the expiration of 12 months from the delivery of the bill, or
(b) after a judgment has been obtained for the recovery of the costs covered by the bill, or
(c) after the bill has been paid, but before the expiration of 12 months from the payment of the bill,
no order shall be made except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the assessment as the court may think fit.
(4) The power to order assessment conferred by subsection (2) shall not be exercisable on an application made by the party chargeable with the bill after the expiration of 12 months from the payment of the bill.
(5) An order for the assessment of a bill made on an application under this section by the party chargeable with the bill shall, if he so requests, be an order for the assessment of the profit costs covered by the bill.
(6) Subject to subsection (5), the court may under this section order the assessment of all the costs, or of the profit costs, or of the costs other than profit costs and, where part of the costs is not to be assessed, may allow an action to be commenced or to be continued for that part of the costs.
…
(9) Unless—
(a) the order for assessment was made on the application of the solicitor and the party chargeable does not attend the assessment, or
(b) the order for assessment or an order under subsection (10) otherwise provides,
the costs of an assessment shall be paid according to the event of the assessment, that is to say, if the amount of the bill is reduced by one fifth, the solicitor shall pay the costs, but otherwise the party chargeable shall pay the costs.
…
(12) In this section 'profit costs' means costs other than counsel's fees or costs paid or payable in the discharge of a liability incurred by the solicitor on behalf of the party chargeable, and the reference in subsection (9) to the fraction of the amount of the reduction in the bill shall be taken, where the assessment concerns only part of the costs covered by the bill, as a reference to that fraction of the amount of those costs which is being assessed."
"If a solicitor who has been retained by a client to conduct contentious business requests the client to make a payment of a sum of money, being a reasonable sum on account of the costs incurred or to be incurred in the conduct of that business and the client refuses or fails within a reasonable time to make that payment, the refusal or failure shall be deemed to be a good cause whereby the solicitor may, upon giving reasonable notice to the client, withdraw from the retainer."
"A solicitor's bill of costs may include costs payable in discharge of a liability properly incurred by him on behalf of the party to be charged with the bill (including counsel's fees) notwithstanding that those costs have not been paid before the delivery of the bill to that party; but those costs—
(a) shall be described in the bill as not then paid; and
(b) if the bill is assessed, shall not be allowed by the costs officer unless they are paid before the assessment is completed."
"(1) Subject to the provisions of this Act, no action shall be brought to recover any costs due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered in accordance with the requirements mentioned in subsection (2); but if there is probable cause for believing that the party chargeable with the costs—
(a) is about to quit England and Wales, to become bankrupt or to compound with his creditors, or
(b) is about to do any other act which would tend to prevent or delay the solicitor obtaining payment,
the High Court may, notwithstanding that one month has not expired from the delivery of the bill, order that the solicitor be at liberty to commence an action to recover his costs and may order that those costs be assessed.
(2) The requirements referred to in subsection (1) are that the bill must be–
(a) signed in accordance with subsection (2A), and
(b) delivered in accordance with subsection (2C).
(2A) A bill is signed in accordance with this subsection if it is–
(a) signed by the solicitor or on his behalf by an employee of the solicitor authorised by him to sign, or
(b) enclosed in, or accompanied by, a letter which is signed as mentioned in paragraph (a) and refers to the bill.
…
(2C) A bill is delivered in accordance with this subsection if–
(a) it is delivered to the party to be charged with the bill personally,
(b) it is delivered to that party by being sent to him by post to, or left for him at, his place of business, dwelling-house or last known place of abode, or
(c) it is delivered to that party–
(i) by means of an electronic communications network, or(ii) by other means but in a form that nevertheless requires the use of apparatus by the recipient to render it intelligible,
and that party has indicated to the person making the delivery his willingness to accept delivery of a bill sent in the form and manner used.
…
(2E) Where a bill is proved to have been delivered in compliance with the requirements of subsections (2A) and (2C), it is not necessary in the first instance for the solicitor to prove the contents of the bill and it is to be presumed, until the contrary is shown, to be a bill bona fide complying with this Act."
"This review of the legislation and the case law leads me to conclude that the burden on the client under section 69(2) of the Solicitors Act 1974 to establish that a bill for a gross sum in contentious business will not be a bill 'bona fide complying with this Act' is satisfied if the client shows: (i) that there is no sufficient narrative in the bill to identify what it is he is being charged for, and (ii) that he does not have sufficient knowledge from other documents in his possession or from what he has been told reasonably to take advice whether or not to apply for that bill to be taxed. The sufficiency of the narrative and the sufficiency of his knowledge will vary from case to case, and the more he knows, the less the bill may need to spell it out for him. The interests of justice require that the balance be struck between protection of the client's right to seek taxation and of the solicitor's right to recover not being defeated by opportunistic resort to technicality."
"Against that background the principles to be deduced from those cases appear to me to be these. (1) The legislative intention was that the client should have sufficient material on the face of the bill as to the nature of the charges to enable him to obtain advice as to taxation. The need for advice was to be able to judge the reasonableness of the charges and the risks of having to pay the costs of taxation if less than one-sixth of the amount was taxed off. (2) That rule was, however, subject to these caveats: (a) precise exactness of form was not required and the rule was not that another solicitor should be able on looking at the bill, and without any further explanation from the client, see on the face of the bill all information requisite to enable him to say if the charges were reasonable; (b) thus the client must show that further information which he really and practically wanted in order to decide whether to insist on taxation had been withheld and that he was not already in possession of all the information that he could reasonably want for consulting on taxation. (3) The test, it seems to me, is thus, not whether the bill on its face is objectively sufficient, but whether the information in the bill supplemented by what is subjectively known to the client enables the client with advice to take an informed decision whether or not to exercise the only right then open to him, viz, to seek taxation reasonably free from the risk of having to pay the costs of that taxation. (4) A balance has to be struck between the need, on the one hand, to protect the client and for the bill, together with what he knows, to give him sufficient information to judge whether he has been overcharged and, on the other hand, to protect the solicitor against late ambush being laid on a technical point by a client who seeks only to evade paying his debt."
Ward LJ also said (at paragraph 57):
"It seems to me, therefore, that the origin of the requirement that [the client] have enough information to take a decision to tax or not to tax was to preserve the right to tax and to ensure it was an informed decision. A client left in ignorance of what had been done should not unfairly be left at risk of paying the costs of taxation."
"prima facie the contract of the solicitor, when he accepts a retainer in a common law action, is an entire contract to carry on the action till it is finished, and he cannot sue for costs before the action is at an end".
However, it came to be recognised that a solicitor might be entitled to raise bills at "natural breaks" in proceedings (see e.g. In re Hall & Barker (1878) 9 Ch D 538, In re Romer & Haslam [1893] 2 QB 286 and Davidsons v Jones-Fenleigh [1980] Costs LR 70). In that connection, Lord Denning MR said in Chamberlain v Boodle & King [1982] 1 WLR 1443 (at 1446):
"it is a question of fact whether there are natural breaks in the work done by a solicitor so that each portion of it can and should be treated as a separate and distinct part in itself, capable of and rightly being charged separately and taxed separately".
More importantly for present purposes, it is "open to solicitors to agree the terms of payment under their retainer and the wiser amongst them nowadays do so" (to quote from the judgment of Simon Brown LJ in Abedi v Penningtons [2000] 2 Costs LR 205, at 206). In fact, interim bills may be provided for "by virtue of an inferred as well as an express agreement" (per Simon Brown LJ in Abedi v Penningtons, at 218). In Harrod's Ltd v Harrod's (Buenos Aires) Ltd [2014] 6 Costs LR 975, Jacob J noted (at 981) "the modern practice of solicitors sending bills on a regular basis which are complete bills, not interim bills".
Must a statute bill include both profit costs and disbursements for the relevant period?
Provisions of the 1974 Act
"[Section 67] does not state that disbursements are not costs or that they need not be included in a statute bill. On the contrary, such payments, including counsel's fees are described as 'those costs'. The section clearly indicates that disbursements are regarded as costs for the purposes of statute bills. Further, section 67 does not render inclusion of disbursements in a statute bill optional. It provides that liability for those costs which have not yet been paid by the solicitor but incurred by him may be included in a statute bill."
"The provisions of section 70 show that costs which are the subject of a statute bill include both profit costs and, where incurred, disbursements. Section 70(6) provides for an 'assessment of all the costs, or of the profit costs' or of the costs other than profit costs. Both profit costs and costs other than profit costs which include disbursements are therefore included in costs for the purpose of section 70."
Bari v Rosen
"[A] solicitor may contract with his client for the right to issue statute bills from time to time during the currency of the retainer. Such bills are known as 'interim statute bills'. They are nevertheless final bills in respect of the work they cover, in that there can be no subsequent adjustment in the light of the outcome of the business. They are complete self-contained bills of costs to date."
"the party must know what rights are being negotiated and dispensed with in the sense that the solicitor must make it plain to the client that the purpose of sending the bill at that time is that it is to be treated as a complete self-contained bill of costs to date (see the judgment of Roskill LJ in Davidsons v Jones-Fenleigh …)."
Practicality and policy
"The client needs to know the total costs incurred over a certain period to enable them to form an evidenced based view of whether to exercise their right under section 70 to challenge the bill. The right of a client to apply for assessment under section 70 is time limited. After expiry of the specified time limit that right is lost as is asserted by the defendant in respect of the majority of bills in this case. The treatment of incomplete bills of costs as statute bills could lead to a multiplicity of applications under section 70 merely to preserve the client's right to apply for assessment. Although this may be unlikely in continuing litigation where client and solicitor are enjoying good relations, it may be otherwise when those relations have become less amicable."
Aaron v Okoye
"If the matter is something which cannot be included in the first bill then the solicitor cannot be criticised for omitting it from the first bill. Indeed, it would be wrong for him to include it. If one is to draw the conclusion that he should therefore be thereafter totally debarred from recovering what otherwise would be a perfectly proper fee for disbursement, that is an unacceptable and unreasonable conclusion which is not necessitated by the premise on which one is proceeding. But, in any event, this is not a case where the paying party, the client, was in any way deceived. The first bill made it clear that counsel's fees were not being included and a covering letter adequately reminded her of the reason why that was so. So she was not deceived. She was not led astray in any way and there is no general principle which precludes the solicitor from then including the relevant item in a later bill when it is proper for him to do so."
The fallback position
Conclusion
Lord Justice Coulson:
Lord Justice Haddon-Cave: