The thorny issue of a client’s rights to a Solicitors Act 1974 assessment of fees has raised its head again recently in Masters v Charles Fussell & Co LLP. Quite rightly within that statute are timelines or limits on the client’s rights to such an assessment. A client cannot reasonably turn around months, or even years, after the event and expect to have maintained those rights. However, most agree that the “strict” timelines are unrealistic in the modern world of interim invoicing and that some areas of the rules have become, or remain, opaque.
The latest “spat” in Masters centres on Master Rowley’s determination that a series of interim invoices rendered were not statute invoices. The bottom line is that invoices need to be statute (either final or interim) for the client to have a right to an assessment and for the timelines for those rights to kick in. There has always been conflict on this, as the question of whether invoices are statute or not can be extremely beneficial to either the client or the lawyers in circumstances where the “nuclear” assessment button is pushed.
Master Rowley had noted the “draconian” nature of the time periods limiting a client’s ability to obtain an assessment, and that that this had led the courts to require solicitors to “make it plain”. Although the solicitors intended a series of invoices to be interim statute bills, Master Rowley considered that they could not be treated as such. This was, in short, because it was far-fetched to consider that the client ought to be aware that there was an entitlement when that information was only provided at the outset of the litigation (many years earlier) and that this detail was not repeated on each of the invoices rendered.
The reader will appreciate that the above is probably too much of a summary to be reliable but the facts are not what I deal with here (and, as ever, are the subject of numerous articles easily found). The point of this blog is to cover practical implications of the judgment and further recent case law in this area, together with the statute itself which still stands.
This clearly, and arguably rightly, puts the burden squarely on the solicitor to communicate from the outset if it intends any interim accounts to be statute or not; to ensure that each statute invoice rendered in such circumstances contains enough information to both be such, and for the client to make an informed decision on the charges rendered therein; and to repeat the relevant information at the time of rendering each invoice. That really is just about it, and one might think that this would be simple enough to achieve. However, we continue to see this debate over and over.
On the initial retainer it should not be too onerous to make clear what the invoicing intentions are and to provide notification of the client’s Solicitors Act rights. That can easily be, in my opinion, standard form, but it may be arguable that an oral notification should also be given at that time (a caution I add harping back to the happy days of the conditional fee agreement (CFA) costs wars, so not necessarily on point or covered by current case law).
I entered the law in the mid to early 90s, and the firm where I first worked had the clients’ rights printed on its invoice paper; nowadays this can just as easily be contained in any electronic template. It is astounding to me that there are firms that still do not do this and yet I am still regularly instructed by clients that are unclear of what their rights are or if they have been advised of them.
Thereafter providing the relevant information for any invoice to be deemed an interim statute invoice is trickier but not insurmountable.
The benefit of interim statute invoicing is that, like in the Masters case, the solicitor can avoid the need to have significant sums spanning several years being the subject of an assessment if the client has not made the right noises contemporaneously. The slight downside is that there is no scope to revisit those charges in the future should circumstances dictate (invariably as a result of an eager costs lawyer with an inter partes costs award having to limit costs that would otherwise be reasonably recoverable for want of an indemnity principle breach).
In short, the burden is and will remain on the lawyer, and the provisions in the Solicitors Act are not so opaque that anyone practicing in law cannot get to grips with them in a short period of time and carry that knowledge with them throughout their time in practice… or until such time as the Act is superseded at least, a prospect for which there are noises.