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Signature requirements in solicitors’ bills of costs

In this piece, I look at the signature requirements of solicitors’ bills both in relation to between the parties’ costs assessment, and solicitor and own client costs assessments.

Assessment of costs: detail required for  fee earners and signatory

In Barking, Havering & Redbridge University Hospitals NHS Trust v AKC, a High Court judge, sitting with an assessor, allowed the defendant paying party’s appeal and struck out the claimant’s bill of costs on the grounds that the signatory of the bill could not be identified and that the bill failed to provide proper information about the fee earners, as required by the Civil Procedure Rules.

The court held that the bill had not been properly certified in accordance with Practice Direction 47, paragraph 5.21, read together with Precedent F (Certificate for including in bill of costs), as it had not been certified by an identified individual; there was an illegible signature with the words “Partner in the firm of Irwin Mitchell LLP” underneath.

It was not clear who had signed, and certification was important, as the rules required that a receiving party should provide a certificate clearly identifying the solicitor signing.

The paper bill for work until 6 April 2018 failed to comply with the requirements to specify the hourly rate and status, including the number of years post qualification experience, in relation to each individual named employee.

Although Practice Direction 47, paragraph 5.11 (2) did not expressly require the names of fee earners, their grade, or years of post-qualification experience to be set out, it did require that the hourly rate and “status” of “each” fee earner be provided.

A bill where claims were made for work done by reference to categories of fee earners, rather than by specifying work undertaken by each individual fee earner, was “intolerably opaque” (paragraph 95, judgment).

Status encompassed any professional qualification, and if the Senior Courts Costs Office grade was not given, the fee earner’s number of years post qualification experience should be given.

The electronic bill of costs for post-6 April 2018 work did not satisfy the full functionality requirements. It did not provide the detail of the work undertaken and the reference formulae in a transparent manner.

The costs judge had been wrong to hold that, as a bill does not have to be in Precedent S format, there was no requirement in Practice Direction 47 that electronic bills must disclose the status and Senior Courts Costs Office grade etc.

Paragraph 5.A2 required the same level of detail and functionality and to hold otherwise undermined the benefits of electronic bills.

This was a clinical negligence claim and the strike out action was in respect of this bill in its current form, and not the claim for costs generally, which was something the High Court regarded as important.

The receiving solicitors refused to identify the signatory to the bill or provide other information.

The High Court judge here said that:

“I confess to some astonishment that the respondent chose instead to withhold the information and argue the point. As Henry LJ observed in Bailey v IBC Vehicles, “an ounce of openness is cheaper than any argument” (paragraph 41, judgment).

The judgment is a very detailed examination of what is required in between the parties’ bills (paragraphs 94 – 96, judgment):

“In my judgment, paragraph 5.11(2) requires both the status and the hourly rate to be given on an individual basis, rather than by reference to categories of fee earners, and it follows that each fee earner should be named in the bill. First, this follows from the language of paragraph 5.11(2) which refers to the status of the “employee” (singular) “in respect of whom costs are claimed” and to the “hourly rates claimed for each such person” (paragraph 94, judgment).

“Secondly, the provision must be interpreted purposively. A bill of costs in which claims are made for work done by reference to categories of fee earners, rather than by specifying the work undertaken by each individual fee earner, is intolerably opaque. It results in the paying party and the assessing judge being unable to consider “all the circumstances” when reaching conclusions as to the amount of costs likely to be or to be awarded when applying CPR 44.4 (see at [30])” (paragraph 95, judgment).

“Without a breakdown of work undertaken by individual fee earners, it is impossible to know whether, for example, two different fee earners within the same status category each spent one hour working on a letter, on consecutive days, or whether only one fee earner spent two hours across two days working on it. This kind of information is capable of revealing that work has been duplicated, in whole or in part. It is also impossible to detect, for example, if a claim has been made that an individual fee earner undertook, say, 10 hours work on disclosure on a day when a claim has also been made for the same fee earner’s attendance at a one day hearing, giving rise to questions about the accuracy of the claim. Such anomalies are hidden if work is claimed by reference to categories of fee earner. In addition, the provision of the names of fee earners enables the paying party to check the expertise and experience of individual fee earners, when considering whether the rate claimed is reasonable” (paragraph 96, judgment).

Solicitor and own client bills: signature and service requirements

Any statute bill that can be sued on must be signed in accordance with subsection (2A) of the Solicitors Act 1974 and delivered in accordance with subsection (2C).

The signature requirements are now contained in section 69 (2A) which requires that a bill be(a) signed by the solicitor or on his behalf by an employee of the solicitor authorized by him to sign, or (b) enclosed in, or accompanied by, a letter which is signed as mentioned at paragraph (a) and refers to the bill.

The old requirement that a bill must be signed by a partner has gone, and anyone in the firm authorised by the solicitor to sign the bill can sign it. This can be a general authority and does not need to be given in each case for each bill, but the solicitor will be responsible, and answerable for, the contents of the bill. The client does not need to be made aware of the authorisation. It is an internal matter for the firm.

If a letter, but not an email, is signed by someone authorised to sign it, refers to a bill enclosed with that letter, then that also satisfies the requirement.

However, it is far easier and safer to ensure that every single bill is signed.

By section 69 (2B) the signature, whether it be on the letter or on the bill, may be an electronic signature.

The service provisions are contained in section 69 (2C) and need noting carefully. In particular, practitioners should note that a bill cannot be delivered electronically unless the client “has indicated to the person making the delivery his willingness to accept delivery of a bill sent in the form and manner used.”

A general agreement by a client to receive communications by email is not sufficient; the client must specifically indicate willingness to accept delivery of a bill sent electronically.

A bill is validly delivered if it is delivered to the party to be charged with it personally, or 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.

It is the delivery of a bill by an electronic communications network, or by other means but in a form that nevertheless requires the use of apparatus by the recipient to render it intelligible, that requires specific authority from the client.

In relation to that point on delivery, the client must state the address to be used and the client may modify or withdraw their authority at any time.

Where a bill is proved to have been delivered and signed in compliance with the above requirements then, until the contrary is shown, it is presumed to be a bill complying with the Act (section 69 (2E)).

A bill delivered electronically is to be treated as having been delivered on the first working day after they day on which it was sent (section 69 (2F)).

It is most important that the client care letter or the terms and conditions of business, or whatever, include a provision that the client consents to a bill being delivered electronically.

Electronic signatures and related certificates

Section 69(5) provides that references to an electronic signature are to be read in accordance with Section 7(2) of the Electronic Communications Act 2000. Section 69(6) provides that “Electronic Communications Network” has the same meaning as in the Communications Act 2003.

Section 7 of the Electronic Communications Act 2000 reads as follows:

“Electronic signatures and related certificates.

(1) In any legal proceedings—

a) an electronic signature incorporated into or logically associated with a particular electronic communication or particular electronic data, and
b) the certification by any person of such a signature, shall each be admissible in evidence in relation to any question as to the authenticity of the communication or data or as to the integrity of the communication or data.

(2) For the purposes of this section an electronic signature is so much of anything in electronic form as—

a) is incorporated into or otherwise logically associated with any electronic communication or electronic data; and
b) purports to be used by the individual creating it to sign.

(3) For the purposes of this section an electronic signature incorporated into or associated with a particular electronic communication or particular electronic data is certified by any person if that person (whether before or after the making of the communication) has made a statement confirming that—

a) the signature,
b) a means of producing, communicating or verifying the signature, or
c) a procedure applied to the signature, is (either alone or in combination with other factors) a valid means of signing.”

The Communications Act 2003 has no fewer than 411 sections and 19 schedules.

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