Costs Judge rules divorce solicitors’ bill “requires explanation” in ordering detailed assessment

In Iwuanyawu v Ratcliffes Solicitors, the SCCO granted an application for detailed assessment of fourteen invoices delivered by her former divorce solicitors, many of which were out of the twelve month time period for assessment on the basis that they did not contain sufficient information to enable the Claimant to know what she was being charged for.

Excessive solicitor charges

The Claimant, Genevieve Iwuanyawu, issued an application in her solicitor-client costs dispute in the Senior Courts Costs Office (“the SCCO”) for detailed assessment of thirteen of fourteen bills of her former solicitors, Ratcliffe Solicitors (“the Firm”), who represented her in divorce proceedings. The invoice that the Claimant excluded from assessment was a disbursement only bill for the court fee for the divorce petition. Some of the invoices totalling just over £13,000 had been delivered more than a year prior to the Claimant issuing a claim. The Claimant considered the charges to be excessive and that the bill should be reduced.

Issues between the parties

1. Whether the Firm’s invoices contained enough information to be statute bills.
2. If they did, whether the Firm was entitled to render interim statute bills; and
3. If the bills were bills which were capable of assessment, whether there were special circumstances to justify the assessment of the bills.

Detailed assessment of solicitors bills

Section 70 of the Solicitors Act 1974 states:

(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 [F2assessed] and that no action be commenced on the bill until the [F3assessment] 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 [F4assessment]), order—

(a) that the bill be [F5assessed]; and

(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the [F4assessment] 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.

Invoices falling within the time limits for detailed assessment

At a hearing on 16 March 2020, the Master ordered that 8 invoices should be the subject of detailed assessment because they had been delivered less than 12 months before the Claimant commenced proceedings and therefore she was entitled to an assessment without having to rely on special circumstances.

The Firm opposed assessment of the other bills for the following reasons:

1. Two invoices had been paid more than 12 months before proceedings were commenced and so the Court did not have jurisdiction to order assessment;
2. Four invoices had been paid but within 12 months of the commencement of the proceedings and so the Claimant would need to show special circumstances.

The Master therefore ordered an adjournment and for the Claimant to file and serve evidence in response to the Firm’s objections.

Just before the adjourned hearing, the Firm filed copies of its client care letter and terms of business. Although these were produced late, the Claimant accepted that she had signed the client care letter and her representative had the opportunity to obtain her instructions on the same.

Issue of statute bills

The parties were in disagreement over whether the firm’s invoices could be classed as statute bills with the Claimant arguing that they did not contain enough information. The second issue in dispute was whether the firm was entitled to render interim statute bills.

The Firm argued that it had a contractual right to render interim statute bills pursuant to its client care letter issued in October 2018.

Master Gordon-Saker held that the firm’s terms of business did not enable the firm to render interim statute bills. The Master further held that the Firm’s bills totalling just over £13,000 called for an explanation.

A second potential special circumstance is that the bills, at least as presented in the hearing bundle, did not contain the usual information about the client’s right to seek an assessment by the court under the Solicitors Act. In my experience it is the invariable practice of solicitors still to provide that information. Yet here it was not apparently included on the bills nor was it mentioned in the client care letter.

The Master held that the fourteen invoices were not interim statute bills and part of a running account to be considered as one bill delivered on 18 October 2019 (delivery of the final bill). It was held that that bill had not been paid and was within 12 months of the issue of proceedings therefore that the bill should be subject to detailed assessment.

Read the full judgment for Iwuanyawu v Ratcliffes Solicitors SC-2020-APP-000080.

Solicitors’ fees in divorce proceedings

In defence of the fees charged, the Firm argued that the Claimant was a ‘demanding client’ however the Master was unable to opine on this without witness evidence from the Firm, that the Firm had failed to file and serve.

The Judge held that it was also ‘unrealistic’ to expect a client to challenge her solicitors’ bills in the middle of family or divorce proceedings.

A client receiving monthly invoices may well have no idea
whether she will wish to challenge them until either she has received sufficient to be caused concern or has reached the end of the matter and can consider the total, perhaps against any estimate that may have been given. 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

Often when a client is involved in stressful litigation in particular, family proceedings, the costs can escalate and clients are not given clear information on fees being charged by professionals. We can assist you in considering your solicitors’ charges and advise you in detailed assessment proceedings.

Instruct 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.