...it is evident that if the Claimant had not instructed Checkmylegalfees.com to investigate the position, the Defendant's letter of 14 February 2018 would never have been written and the Claimant would never have received any form of notice in relation to the sums taken by the Defendant in payment of bills 53969 and 54689
Master Leonard, 2nd October 2018 [para 32]
If the Defendant, as it does, claims the right to retain all of the money received by it for the Claimant's costs and disbursements, then it must render a complete and final bill which includes them.
Master Leonard, 2nd October 2018 [para 57]
A welcome decision reaffirming that the entitlement to assessment runs from delivery of a "statute bill" and that a statute bill must include all costs and disbursements retained by the solicitor, and not just those that are to be or were paid direct by the client.
Master Leonard found that the failure to deliver such a bill (combined with the failure to give the client prior written notification of all costs being retained by the solicitor) amounted to a breach of SRA Accounts Rule 17.2 (designed to ensure that a client is fully informed of monies being appropriated by a solicitor in payment of fees),
Key Facts
- This was a standard time based CFA, with a 100% success fee [para 14]
- Upon settlement, no bill was delivered, but the letter reporting the deduction of fees got the arithmetic wrong [18];
- The solicitors deducted more than they were entitled to under the retainer [19]
- Bills in respect of stage 1 and 2 costs were raised but not delivered to the Claimant [20-21]
- A bill was delivered to C for the success fee only [22]
- None of the bills included disbursements [23]
- CMLF, having established that no "statute bill" had been delivered, requested delivery of a statute bill and, when that was ignored, issued an application for delivery of a bill [35]
- Ds then wrote directly to C [36] explaining its charges and offering to refund £140 "as a gesture of goodwill" [39], but which was in fact simply a refund in light of the previous arithmetical error [42]
Defendant's Submissions
- The stage 1 and 2 costs belonged to the solicitor not the client, so there was no need to send the client a "bill" for them [45]
- Therefore the single bill sent to the client for the success fee alone was a "statute bill" [46]
- Alternatively, a bill was discretionary and C already had sufficient information [47]
- C's application was too late [49]
Conclusions
- Fixed costs do not "belong" to the solicitor [50-54]
- If a solicitor claims the right to retain money for costs and disbursements, then they must be included in a final bill [57]
- A "written notification of costs" does not replace a bill; if the client wants a bill because he / she is unhappy, then they are entitled to a bill [58]
- The failure to send a complete, clear and accurate bill and / or prior written notification was a breach of the SRA Accounts Rule 17.2 [59]
Footnote
...I would offer the view that Ms Moore, when acting as a Costs Lawyer with a right to conduct litigation, is at the least entitled to expect from the Defendant the same professional courtesy as a solicitor would expect. It does not seem to me that she has received it.
Master Leonard, 2nd October 2018 [para 66]
Master Leonard was critical of the Defendant's attempt to encourage the Defendant to deal direct with them , notwithstanding that Miss.Moore of checkmylegalfees.com had notified them that she was acting. There are of course parallels here with the Gavin Edmondson Solicitors Ltd v Haven Insurance Company Ltd [2018] UKSC 21 (18 April 2018) case, in which Haven were subject to much criticism (by the legal profession) for direct contact, and rightly so. Solicitors cannot however have it both ways and make direct contact with a former client who has found new representation, simply because they do not want to deal with a complaint over fees.