If you have received a bill (i.e. an invoice) from your solicitor which you consider may be overpriced for the work that you instructed to be done, our specialist costs lawyers can help you understand the work done and consider the reasonableness of the invoice(s) and, if appropriate, advise on the process of negotiation and assessment with your current solicitors.
What is Assessment under the Solicitors Act 1974?
Detailed assessment means the examination by a costs judge of the costs that are recoverable by one litigant from another or by a lawyer. Costs judges often sit in the Senior Courts Costs Office (SCCO) which is part of the High Court. Prior to the Civil Procedure Rules 1999, assessments were known as ‘taxation‘ and were performed by taxing masters.
The statutory law, civil procedure and rules of the court, concerning the charging of solicitors’ fees and legal costs is complex. The Senior Courts Costs Office is a specialist court within which specialist costs judges are appointed to deal specifically with disputes over legal fees and costs.
Our costs lawyers regularly provide specialist legal advice on whether solicitors fees claimed are reasonable or excessive. Where there are issues, we know how to best raise disputes as to legal fees and costs. We can provide advice on the enforceability of solicitor/client retainers; can undertake costs negotiations on behalf of clients and can deal with the entire detailed assessment process under the Solicitors Act 1974.
What are Solicitors’ Costs?
Solicitors’ costs are sums paid for legal services and include disbursements, expenses, solicitor “profit costs”, counsel fees and any additional funding under a funding arrangement.
There is a distinction between party/party costs and solicitor/client costs. The former is governed by costs rules between the parties in litigation, and these are costs ordered by one party to another party under the Court’s rule. For solicitor/client costs, the payable costs are calculated according to the terms of the retainer contract between the solicitor and the client.
The retainer is the central basis of all solicitors’ costs. Bills, or invoices as they are also known, may be sent as the clients’ case proceeds. At the end of the matter, a client is sent a final bill. If any of these delivered interim or final bills amount to a statute bill then a client’s entitlement to challenge the assessment of the costs under the Solicitors Act 1974 is activated.
The Starting Position for Assessing or Taxing Solicitor – Client Costs: The Retainer
Before the SCCO assesses solicitor and own client costs, it is necessary to determine the status of the retainer between the parties. Although solicitor/client costs are primarily a matter of contract between the parties, the retainer is subject to supervision by the provisions in the Solicitors Act 1974.
Part III of the Solicitors Act 1974 creates two types of retainers under which the client’s ability to challenge fees charged are recovered: non-contentious business agreements (sections 56 to 58 Solicitors Act 1974) and contentious business agreements (sections 59 to 66 Solicitors Act 1974). The former work relates to transactions occurring between one or more parties, such as the purchase of property. The latter relates to legal work taking place between two or more parties, such as a litigation proceedings to resolve a dispute. A solicitor relying on a contentious business agreement must obtain permission of the Court to enforce it.
Unless the retainer specifically states otherwise, following the Jackson Reforms, the initial position for the amount of costs paid is that the client must pay the costs assessed on an indemnity basis (CPR 46.9(3)). Significantly, unlike for costs assessed on a standard basis, the proportionality test will not apply; the costs are either reasonable or they are not. The Court will presume costs:
“a) have been reasonably incurred if they were incurred with the express or implied approval of the client;
b) to be reasonable in amount if their amount was expressly or impliedly approved by the client;
(c) to have been unreasonably incurred if –
(i) they are of an unusual nature or amount; and
(ii) the solicitor did not tell the client that as a result the costs might not be recovered from the other party.”
In addition, in a dispute between a solicitor and client, “the Court will resolve any doubt as to whether costs were reasonably incurred or were reasonable in amount in favour of the solicitor” (CPR 44.3 (3)). Therefore, the bar for a client to prove that a solicitors’ costs were unreasonable, is set at a high level as the client bears the burden in disproving reasonableness.
The effect of the Courts’ presumptions means a clients’ objections must be very focused and clear cut. We can assist with ensuring objections are carefully prepared to achieve an optimal outcome.
Billing: Requirements for a Statute Bill
The retainer governs the way in which the solicitor will provide legal services and how the client will pay for them. The way in which a solicitor makes a demand for money from the client is governed by the rules in the Solicitor Act 1974. Once an interim or final statute bill is sent, a client has a right to make a formal application to have those costs assessed. A solicitor can only commence proceedings to sue for their fees once an invoice is delivered to the client that complies with the statutory conditions of the Solicitors Act 1974 and the SCCO’s implied requirements.
Determining whether an invoice is a statute bill is very important and has been the focus of much case law. Therefore, it is important to ascertain the requirements for a statute invoice: these formal requirements are set out in s.69 Solicitors Act 1974:
- The solicitor must have been legally entitled to send the bill. Unless the client has agreed to a provision in the retainer for interim invoices, a solicitor can only request payments on account or reasonable expenses for future cost. As these are not statutory in nature a solicitor cannot sue upon them and a client cannot dispute them under the Solicitors Act 1974. A solicitor is entitled to render a statute bill once all the work under the retainer has been completed or if there is an express agreement to render interim statue invoices or if there is a “natural break” in ongoing litigation or if the retainer has been terminated.
- The invoice must be signed by the solicitor or their authorised employee, in accordance with s.69 (2A). Alternatively or in addition, a signed letter could be enclosed which refers to said bill.
- The invoice must be delivered to the party charged with the bill personally, in accordance with s.69 (2C). This can be by post or electronically. The client must have previously indicated a willingness to accept delivery. The delivery date is significant because the time limit for challenging a statute bill does not run from the date of the invoice but from the date of delivery.
- The bill must contain sufficient narrative for the particular client. The court requires that the bill must contain “sufficient narrative” to allow the client to know what they are being charged for and to provide them with enough information to ascertain whether to exercise their right to have the bill assessed. This is a requirement that the courts have constructed when looking at s.69 and has been recently elucidated by Mrs Justice Swift in Carter Ruck (a firm) v Mireskandari  EWHC 24 (QB).
Challenging a Solicitors’ Bill
Detailed Assessment Proceedings under Solicitors Act 1974
If a statute bill has been delivered to a client and the client believes they have been overcharged then the client can request the solicitor to commence detailed assessment proceedings or a request can be made to the Senior Courts Costs Office to make a detailed assessment of the bill. If upon assessment, the bill is determined to be unreasonable, the bill will be reduced. Our costs laweyers have extensive experience in assessment of bill proceedings before the SCCO.
The assessment procedure is governed by the Civil Procedure Rules. There are two ways an assessment claim can come before the SCCO. Either, a client can make a claim for assessment pursuant to s.70 Solicitors Act 1974 and CPR 67.3(2). Or, as a defence or counterclaim to a claim brought by the solicitor to recover costs using CPR 7. The proceedings are in two stages.
Firstly, the entitlement to an order for assessment. Under s.70(2), a client is entitled to assessment as a right if an application is made within one month of delivery. Clients only have a short time to challenge a solicitors’ bill so it is imperative to contact us quickly to ensure your claim does not become time-barred. Generally, this stage can be conducted at minimum cost to the client. A Part 8 claim form (N208), the relevant court application fee and a copy of the disputed bill must be sent to the SCCO or local District Registry.
Secondly, if the Court is satisfied as to entitlement it will make a Court Order allowing a detailed assessment to take place. If a detailed assessment Order is not granted by the Court, then we can also assist in appealing the decision. Following the Order, the solicitor will complete a detailed assessment request form (N258C) and serve a detailed bill of costs upon the client. At this stage, the client- often within 21 days- must provide Points of Dispute which flag up challenges to the costs, failing which a Default Costs Certificate will be obtained by the solicitor.
We are highly experienced in providing well-crafted Points of Dispute examining every aspect of an unreasonably high bill. CPR 47.9 states that Points of Dispute must “identify any general points or matters of principle which require decision before the individual items in the bill are addressed” and “identify specific points, stating concisely the nature and grounds of dispute.” For example, examining excessive time, disproportionate number of communications, unreasonable disbursements and unnecessary counsel meetings claimed, to formulate a claim that a competent solicitor acting with all due skill and alacrity should have been able to obtain the same without the need to charge a disproportionate fee. Moreover, we are well-versed in negotiating a favorable compromise to a lower bill or failing which, representing our client’s interests at a detailed assessment hearing.
For costs disputes below £75,000 a provisional hearing will usually occur without the presence of the parties, and for claims in excess of £75,000, the parties and their specialist legal costs representatives will attend an oral hearing. The Court’s Costs Judge will determine what was a reasonable amount for the solicitor to have charged. The Costs Judge examines the bill in detail and in particular, examines how reasonable the costs are and how proportionate they are to the case’s issues judged on an indemnity basis. Once the SCCO has decided the amount of the bill payable, usually payment must be made within 14 days.
Costs of a Solicitor/Client Statutory Assessment – the 1/5th Rule
Ordinarily, in litigation the CPR provides that the unsuccessful party pays the costs of the successful party. However, in legal costs assessment proceedings, the only factor is the amount by which the solicitors’ invoice is reduced by on assessment. According to the Solicitors’ Act 1974:
“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.”
(s.70(9) Solicitors Act 1974)
Therefore, if the client reduces the solicitors’ bill by at least one fifth (20%), then the client is entitled to the costs of the statutory detailed assessment proceedings.
SCCO Sample Scenarios: Challenging a Solicitors’ Bill
There have been cases where legal professionals have sent and delivered what their client thought were on account invoices on a monthly basis, which then later turned out to be statute invoices. As a result the clients’ right to assess the bill has become time-barred. The SCCO judge will likely examine the contiguous circumstances as well as the retainer to ascertain what the agreement was between both parties at the inception of their relationship and what was agreed as the case progressed. It is for the solicitor to demonstrate that the client understood the effect of each bill sent.
Furthermore, there are situations where a client has sent large amounts of money on account and later expresses dissatisfaction with the amount paid thus far. However, some cases before the SCCO demonstrate that some solicitors will not send out a statute invoice. This means the client can not avail themselves of the Solicitors’ Act 1974 assessment procedure. We can help a client in this situation by appealing to the Court to order the solicitor to deliver a statute invoice under s.68 Solicitors’ Act 1974 and once delivered, order an assessment of the invoice under s.70 Solicitors’ Act 1974.
Some clients may have paid the invoice, but after the time limit expires, they consider that the invoice was too high. Under s.70(2), a client would need to demonstrate “special circumstances” to justify an order that the invoice should be assessed. For example, “special circumstances” could apply where the solicitor has given improper advice on a client’s right to assessment or where the solicitor has otherwise improperly convinced the client not to have their fees assessed.
Some clients may complain about the price of solicitors’ fees when they feel that the solicitor has not done a good job on their case or the outcome is not what was hoped for. Such clients should proceed carefully with the benefit of advice, as a Solicitors’ Act 1974 assessment only applies to what ought to have reasonably been charged for work and not for the quality or the result of the work. If a solicitor has performed their job in a negligent way, restitution lies in professional negligence and our professional negligence lawyers should be consulted in this situation.
City of London Specialist Legal Costs Lawyers
Our SCCO Legal Costs Dispute Lawyers are experienced in checking and disputing legal fees. We are experts in assessing whether the time claimed for is reasonable and whether your solicitor may have overcharged. We are well versed in both negotiating a reduction with your solicitor and attending detailed assessment proceedings at court if necessary. Our team have an in-depth knowledge of litigation against the client or solicitor under the Solicitors Act 1974.
As a leading high-profile law firm regularly featured in the national and international media and with a track record of success, you can be assured your Legal Costs claim will proceed with precision and care.
Book an Initial Consultation with a Legal Costs Lawyer
If you dispute your solicitors’ legal fees and want expert legal advice, we invite you to contact us so that we can assess your case. We can subsequently provide urgent help, advice or representation to clients from our expert legal team of leading SCCO Legal Costs Dispute Lawyers.
Please note, you only have a short window to challenge a solicitors’ bill so it is imperative to contact us quickly to ensure your claim does not become time-barred. Just call us on 02071830529 or complete our contact form.