This judgment was handed down remotely at 10.30am on [date] by circulation to the parties or their representatives by e-mail and by release to the National Archives.
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COSTS JUDGE WHALAN
Costs Judge Whalan
Introduction
- This judgment determines a number of preliminary issues raised in a Part 8 claim issued by the Claimant against the Defendant under the Solicitors Act 1974 ('SA 1974').
- Page references in parenthesis refer to the Hearing Bundle ('HB', 1-959), the Invoice Bundle ('IB', 1-568) and an Authorities Bundle ('AB', 1-450).
- The Claimant retained the Defendant in June 2022 in connection with litigation brought against the Mehta family in respect of an alleged US$1 billion fraud. There were three separate sets of proceedings and the Defendant was instructed in response to the issue of a worldwide freezing order ('WFO') against him and his family. Other 'Mehta Defendants' were separately represented. The litigation involved applications to have the WFO listed and consideration of an appeal, along with orders requiring the Claimant to surrender his passport and provide details of assets.
- The retainer began on 22nd June 2022 and was terminated by the Defendant on 5th May 2023. The Defendant delivered to the Claimant 24 invoices to the total value of £3,124,674.04 (including VAT and disbursements). The Defendant asserts that 13 invoices were paid by the Claimant more than 12 months before the issue of this action, meaning that he is not entitled to a SA 1974 assessment of these invoices. The fact of 'payment' is disputed by the Claimant. The Defendant claims that the remaining invoices remain unpaid. With the exception of one invoice dated 25th May 2023, they were all delivered to the Claimant more than 12 months before the issue of the applications, meaning that the court may only order a SA 1974 assessment if 'special circumstances' are demonstrated. The sum outstanding on the unpaid invoices is £697,583.05 (including VAT and disbursements).
Issues
- This judgment addresses a number of core issues relevant to the proceedings:
(i) Were the invoices delivered by the Defendant to the Claimant interim statute bills, or did they comprise a series of interim invoices delivered as part of a 'Chamberlain' bill which became 'final' with the delivery of the last invoice in May 2023?
(ii) Further, or alternatively, was the retainer a Contentious Business Agreement ('CBA') within the meaning of ss59 to 63 of the SA 1974 and, if so, was it a 'fair and reasonable agreement'?
(iii) Were some of the invoices 'paid' within the meaning of SA 1974? Further, or alternatively, can the Claimant demonstrate 'special circumstances' pursuant to s70(3) of the SA 1974, such that it would be just to order an assessment?
Interim statute bills or a 'Chamberlain' bill?
- The Claimant submits that the invoices delivered by the Defendant were not interim statute bills but rather an entire Chamberlain bill, delivered effectively with the last invoice dated 25th May 2023.
- The parties cite and rely on a number of relevant authorities, namely Ralph Hume Garry v. Gwillim [2003] 1 WLR 510, Vlamaki v. Sookias & Sookias [2015] 6 Costs LR 827, Boodia v. Richard Slade & Co. Solicitors [2019] 1 WLR 1126 and, most recently, the judgment of Coulson LJ in Ivanishvili v. Signature Litigation LLP [2024] 1 WLR 4636. Three relevant, general propositions emerge. First, the burden of proving that the retainer provides for the delivery of interim statute bills, in contrast to requests for interim payments generally, falls on the receiving party. Second, when construing the retainer, it is necessary to refer to the relevant contractual provisions as a whole. Third, in determining whether a retainer does allow the solicitor to render interim statute bills, the court should resolve any fundamental ambiguity against that construction.
- The retainer is set out in the 'Engagement or Retainer Letter' dated 1st June 2022 and the Defendant's incorporated 'Terms of Business'. The Defendant also refers to 'General Notes Attached To Our Terms Of Business'.
- The Retainer Letter dated 1st June 2022 contains the following relevant provisions:
7. OUR CHARGES
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The Timing of our Bills
We will send you bills on a regular basis. This will generally be on a monthly basis. We may bill you at any time for disbursements or specific expenses incurred already, or shortly to be incurred. The status of our bills is explained in paragraph 5 of our Terms of Business.
As to the Terms of Business:
I attach a copy of our present Terms of Business (March 2020) which now governs all our work for clients. …The Terms of Business should be treated as incorporated into this letter, and attached to them are General Notes which do not form part of our contract but give you some useful information and explanations.
- The Terms of Business contain the following relevant provisions:
1. CALCULATION AND SCOPE OF OUR FEES
We are entitled to be paid reasonable remuneration for the work that we do for you. Time spent is usually the most important single element in calculating our fees, but they will take account of the complexity, difficulty and novelty of the matter, the skill, specialised knowledge and responsibility required, the number of documents involved, the place where the work has to be done, the value of the transaction and the importance of the matter to you.
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5. DELIVERY OF BILLS
Bills will be rendered from time to time during the course of our work, and the timing of bills will depend on the work we have done and the nature of that work. For example, bills may be rendered even if the matter is not completed, when a significant amount of work has been carried out, or if significant disbursements have been incurred. Bills will usually be rendered on a monthly basis or more often in litigation and in some other matters, where a significant amount of work has been carried out.
Unless otherwise stated, each bill issued to you is a final bill covering the total charge for the work carried out within the stated period. Further, unless otherwise stated, each bill has the status of a statute bill which means that in the event of non-payment we are entitled to issue proceedings for recovery through the courts after the expiration of one month from the date of delivery of the bill. A statute bill also gives you certain rights to have the bill assessed by the court under the Solicitor's Act 1974 if you consider that you have been incorrectly charged. The right to have a bill assessed are however subject to time limits and lost if action is not taken by you promptly. You should note that your right to have a bill assessed is separate from your right to complain as set out in Section 31 of the Terms of Business. If the "value" or "importance" element is achieved only as a result of the completion or final settlement of the case, and has not been taken into account in earlier bills, we reserve the right to take it into account in our concluding bill. We may also include in a later bill any specific expenses or disbursements incurred in an earlier period but not previously billed.
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It is usual practise for us to send to you regular statements showing bills that we have raised and that has yet to be paid. This may include recently raised bills. We will usually send a statement to you around the 6th day of the month but this may vary.
- The 'General Notes Attached To Our Terms Of Business' include the following:
These General Notes do not form part of our contract with you, but we hope they give you useful information about our work for you.
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C. Our Fees
We may include in our fees a value element based on the amount or value of any money or property involved or the importance of the matter. This might be the case, for example, in property transactions, in the administration of estates and in commercial transactions. This value element (if applicable) will be mentioned in our Engagement Letter or discussed with you in advance. It will never be greater than the scales approved by the Law Society or the courts, where applicable.
- The Claimant, in summary, submits that interim statute bills are defined by the contractual requirements of certainty and finality. The references at parts 1 and 5 of the Terms of Business to the 'value' and 'importance' elements are fatal necessarily to the submission that the invoices delivered by the Defendant were interim statute bills. By retaining a right to revisit the charges raised in the invoice, the solicitors have effectively qualified the finality and completeness of these bills, so that they ceased to be interim statute bills. Mr Dunne refers specifically to paragraphs 29-34 and 56-58 of the judgment of Coulson LJ in Ivanishvili (ibid). Further, at the very least, the value and importance reservations introduce an element of ambiguity into the contractual interpretation of the retainer, and this must be determined against the solicitor. Mr Dunne refers specifically to paragraph 15 of the judgment of Walker J in Vlamaki (ibid). Mr Dunne notes the Defendant's reference to the General Notes but submits that this document is irrelevant to the contractual interpretation of the retainer. First, the General Notes are not part of the contract. Second, the provision at C. Our Fees only refers to the value element and not the importance element.
- The Defendant, in summary, submits that the invoices delivered were interim statute bills. Paragraph 5 of the Terms of Business comprises a clear statement of the contractual right to render statute bills, which are final bills for each relevant period. The value or importance reservation is irrelevant to this case. It does not apply to work of the type raised by the Claimant's case. Crucially, the provision only applies if it is mentioned in the Engagement/Retainer Letter or discussed with the client in advance of the retainer. It is common ground evidentially that there were no such discussions or reservations in this case. Although the General Notes do not form part of (and are not incorporated into) the contract, the Notes are still relevant to a contractual interpretation of the retainer, and they demonstrate that the Claimant knew from the outset that the reserved right to apply additional value and/or importance charges would not apply to his retainer. Looking at the invoices delivered, they are very detailed and reproduce, in practical terms, all the necessary elements of interim statute bills.
- I am satisfied, on the proper contractual interpretation of the retainer, that the invoices delivered by the Defendant to the Claimant were interim statute bills, and not just a series of interim invoices delivered as part of a Chamberlain bill. I prefer, in other words, the submissions of Mr Stacey for the Defendant to those of Mr Dunne for the Claimant. Paragraph 5 of the Terms of Business refers clearly to the fact that "each bill issued to you is a final bill covering the total charge for the work carried out within the stated period". Moreover, "each bill has the status of a statute bill", unless otherwise stated. Specific reference is made to the solicitor's right to sue on the invoice and the client's concomitant rights to have the bill assessed under the Solicitors Act 1974. I am satisfied that the "we may also include…" reservation at the end of sub-paragraph 2 of paragraph 5 is neither relevant nor applicable to this retainer. The General Notes are not part of the contract so they are not incorporated into the retainer. They are, however, relevant to the interpretation of the terms of the contract. The Claimant was accordingly aware from the outset that the additional fee reservation was only applicable if it was discussed in advance or referred to in the Engagement (Retainer) Letter and, insofar as no such discussions took place with the solicitor, it did not apply. I am not persuaded by Mr Dunne's reference to the fact that the Notes only refer to the value element. In fact, the Notes define the value element in a reference to 'the amount or value of any money or property involved or the importance of the matter'. The value element, in other words, incorporates, inter alia, the importance element, and so the Notes refer to each adequately. Thus, although the drafting may be a little clumsy, it is not undermined by any fundamental ambiguity that militates against the conclusion that the invoices were interim statute bills. If, conversely, I am wrong about my definition of ambiguity, I am quite satisfied that any such ambiguity can be resolved satisfactorily by reference to the Terms and Notes.
- The invoices delivered by the Defendant to the Claimant exhibited all the relevant requirements of interim statute bills. They were, in fact, drafted with considerabel detail, meaning that the Claimant was provided with a clear breakdown of the charges, and the invoices displayed clearly his rights under the Solicitors Act 1974. I find accordingly that the 24 invoices delivered by the Defendant to the Claimant between 22nd June 2022 and 5th May 2023 were interim statute bills within the meaning of the 1974 Act.
Contentious Business Agreement
- The Claimant submits that the retainer with the Defendant is a Contentious Business Agreement ('CBA') within the meaning of ss59-63 of the SA 1974, and that the court must accordingly determine whether it is 'fair and reasonable', although this issue should be determined at a subsequent hearing. The Defendant submits that the retainer is not effectively a CBA, as the contract reflects the parties' intention that it was to be assessed by reference to the provisions of s.70 of the SA 1974. Further, or alternatively, the agreement is 'fair and reasonable', an issue that can be established at this hearing.
- A CBA is defined at s.59(1) of the SA 1974 as follows:
Subject to sub-section (2), a solicitor may make an agreement in writing with his client as to his remuneration in respect of any contentious business done, or to be done, by him (in this Act referred to as a "contentious business agreement") providing that he shall be remunerated by a gross sum or by reference to an hourly rate, or by a salary, or otherwise, and whether at a higher or lower rather than that at which he would otherwise have been entitled to be remunerated.
The definition is broad and, submits Mr Dunne, it is for a solicitor to show that a written retainer is not a CBA within the scope of s.59.
- Mr Dunne supports this proposition by reference to the judgment of HHJ Cadwallader in Finnan v. Candey Limited [2024] EWHC 2157 (Ch), which stated (para. 31-32) that:
This is a permissive, rather than a prescriptive, provision and is apt to cover almost any agreement for remuneration for contentious business subject to the exceptions which do not apply here: see Acupay System v. Stephenson Harwood LLP [2021] EWHC B11 (Costs). The agreement in the present case was in writing and related to remuneration for contentious business done or to be done by the Respondent. It provided for remuneration by reference to hourly rates as well as gross sums. It was therefore a contentious business agreement.
- The Claimant asserts that the retainer dated 1st June 2022 was a CBA because:
(i) It is an agreement in writing for specific pieces of contentious business.
(ii) It is, or contains, an agreement as to the Defendant's remuneration in respect of such contentious business.
(iii) It provides for such remuneration to be by reference to specific hourly rates.
(iv) There is no mechanism for remuneration to be at any higher rates without notification.
(v) There is no mechanism at all for remuneration to be at lower rates.
(vi) It required the client to sign and in doing so accept the terms (including the term as to charging by reference to hourly rates) and thus to be bound by them.
Accordingly, submits Mr Dunne, the Claimant enjoys the statutory client protection provisions at s.60-63 of the Act, specifically the requirement that it is fair and reasonable at s.61.
- For the Defendant, Mr Stacey submits that the determinative issue is not the precise form of the retainer, but rather whether in substance it confers the rights outlined in ss.59-63 of the SA 1974. The 1974 Act provides for two "mutually exclusive" regimes, one under ss.59-63 and one under ss.69-71. Insofar as the parties intended that the Claimant's rights in this retainer arose under s.70 of the Act, the agreement is not effectively or practically a CBA.
- Mr Stacey relies on the reasoning of CJ Leonard in Acupay System LLC v. Stephenson Harwood LLP [2021] EWHC B11. In Acupay it was agreed that the terms of the retainer – in that case a Conditional Fee Agreement ('CFA') – "are consistent with it being a CBA" (para. 175), but that this did not in itself determine the form of the client's rights under the 1974 Act. The relevant part of CJ Leonard's judgment is as follows:
177. It seems to me that the provisions of section 59(1) of the 1974 Act are permissive, rather than prescriptive. A solicitor is at liberty to make an agreement in writing with a client which will qualify as a CBA. Section 59(1) provides that it may take many forms; in fact just about any remuneration arrangement seems to be covered, subject to certain exceptions of policy provided for in section 59(2) and elsewhere.
178. It does not seem to me necessarily to follow that any written agreement providing for remuneration within the wide range of options provided for by section 59(1) must be a CBA, even if the agreement shows that it is not. Section 59(1) does not say that, and I see no basis for importing those words into it.
179. …The issue is whether the parties have agreed to be bound by one or other of two mutually exclusive costs regimes provided for by the 1974 Act. To decide that, one must look to the terms of the agreement. A provision to the effect that the agreement is not a CFA will not merely be a matter of form. It will go to the substance of the agreement.
Crucially, submits Mr Stacey, it is clear from the decision in Acupay that the 1974 Act confers two mutually exclusive regimes, one under ss59-63 and one under ss69-71. CJ Leonard referred repeatedly to the existence of two 'mutually exclusive' regimes, for example at para. 168 of his judgment.
- It is evident, submits Mr Stacey, that the Defendant's retainer with the Claimant falls within the s.70 regime. (i) The agreement was never described as a CBA and nowhere in the Retainer Letter, Terms of Business or General Notes is reference made to the rights conferred pursuant to ss.59-63 of the 1974 Act. (ii) The Terms of Business provide that the invoices delivered by the Defendant are "statute bills", terminology consistent with s.70 of the 1974 Act. (iii) The Terms of Business when referring to the client's rights of assessment under the 1974 Act, note that the entitlement is "subject to time limits and lost if action is not taken by you promptly" (HB 35). Again, this refers specifically and exclusively to the entitlement under s.70. (iv) The Terms of Business also provide "that in the event of non-payment we are entitled to issue proceedings for recovery to the courts after the expiration of one month from the date of delivery of the bill" (HB 35). Again, this right is indicative only to the ss.69-71 regime. (v) The relevant wording in the Terms of Business is reproduced at the foot of the first page of every invoice delivered by the Defendant to the Claimant. Thus, the information provided on the front of the invoice dated 20th June 2022 (IB 4), was reproduced on every subsequent invoice. Again, this represents a clear assumption of the assessment regime at s.70 of the 1974 Act.
- Mr Dunne, in response, notes that Acupay (ibid) is not binding on me and he submits that, in any event, CJ Leonard's findings were wrongly held. More particularly, Acupay can be distinguished, insofar as the retainer was held not to be a CBA, "because it shows expressly that it is not" (para. 188). It was this exclusion that triggered the entitlement to choose between the provisions of s.59 or the separate statutory regime provided for by s.70 of the 1974 Act.
- The SA 1974, in my conclusion, confers two separate and mutually exclusive costs regimes under ss.59-63 and ss.69-71. The relevant and determinative issue, in other words, is not the precise form of the retainer, but whether it invokes the protective regime at ss. 59-63 or ss. 69-71. The protection afforded to the client at ss.59-63 (rights which are, in many respects, quite limited) are separate to those outlined at ss.69-71. The ss.59-63 regime does not and cannot operate as a residuary entitlement to a client whose rights under s.70 may have expired through effluxion of time. Although the decision of CJ Leonard in Acupay v. Stephenson Harwood (ibid) is in no way binding on me, I agree with his conclusion and I am satisfied that his reasoning is correct. It is necessary to consider the terms of the retainer to identify the regime adopted by the parties. Here, the Terms of Business demonstrate clearly that it was the parties' intention to assume the rights and obligations set out under ss.69-71 of the Act. This fact confirms explicitly there will be invoices delivered by the Defendant to the Claimant. I find, therefore, that the Claimant's rights under the 1974 Act are those set out under ss.69-71 and that by reason of the terms of this retainer, there is no entitlement under ss.59-63. Accordingly, it is not necessary for me to determine whether the agreement was 'fair and reasonable'.
Solicitor's Act Assessment
- The Defendant delivered 24 invoices to the Claimant between 22nd June 2022 and 25th May 2023 in a total value of £3,124,674.04. These invoices are detailed in a 'Summary of Bills' (HB 4) and in the 'Invoices and Payment History' and 'Outstanding Invoices' sections of the statement of Timothy Bignell, a Partner at the Defendant, dated 8th November 2024 (HB 379-87). The Defendant, in summary, asserts that various invoices were paid in full by the Claimant (HB 384). Invoices delivered between 30th November 2022 and 25th May 2023 remain unpaid (HB 386) and the sum outstanding is £697,583.05 (including VAT and unpaid disbursements) (HB 386).
- The Claimant's application raises two relevant issues, (i) have the bills been 'paid' within the meaning of the 1974 Act? and (ii) can the Claimant demonstrate 'special circumstances' pursuant to s.70(3) of the SA 1974?
- Section 70 of the SA 1974 provides (where relevant) as follows:
70. Assessment on Application of Party Chargeable or Solicitor
(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 assessed and that no action be commenced on the bill until the assessment is completed.
(2) Where no such application is made before the expiration of the period mentioned in sub-section (1), then, on an application being made by the solicitor or, subject to sub-sections (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 assessment), order –
(a) that the bill be assessed; and
(b) that no action be commenced on the bill, and that any action already commenced be stayed, until the assessment is completed.
(3) Where an application under sub-section (2) is made by the party chargeable with the bill –
(a) after the expiration of 12 months from the delivery of the month, 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,
no order shall be made except in special circumstances and, if an order is made, it may contain such terms as regards the costs of the assessment as the court may think fit.
(4) The power to order assessment conferred by sub-section (2) shall not be exercisable on an application made by the party chargeable with the bill after the expiration of 12 months from the payment of the bill.
Payment
- The Claimant submits that none of the invoices were paid within the meaning of s.70 of the 1974 Act. The Defendant submits that payment was made for the bills discharged by the Claimant.
- The recent Supreme Court case of Oakwood Solicitors Ltd. v. Menzies [2024] UKSC 34, gives guidance as to "payment", in s.70. Lord Hamblen's judgment at paragraphs 71 and 73 states:
71. In summary, the authorities show a long established understanding as to what payment by deduction or retention requires in this context both generally and with specific reference to section 70 and its statutory predecessors. The need for a settlement of account has been consistently stated in cases from In Re Bignold in 1845 to Harrison v. Tew in 1987. This requires an agreement to the sum taken or to be taken by way of payment of the bill of costs. Such an agreement may in an appropriate case be inferred from the parties' conduct and in particular from the client's acceptance of the balance claimed in the delivered bill. The authorities therefore provide strong support for the Client's case as the need for an agreement as to the amount to be made in respect of the bill of costs and that mere delivery of the bill does not suffice.
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73. The Court of Appeal also stressed that the phrase settlement of account is not used in section 70(4) and said that it should no longer be used in this context. It nevertheless informs what is meant by "payment" in this context. It may equally be said that section 70(4) does not refer to knowledge of the bill of costs and consent to the transfer of money, which is what the Court of Appeal held "payment" to mean.
- The Claimant submits that the receipts identified by Mr Bignell cannot amount to payments within the meaning of the 1974 Act, as they were made by a variety of sources, including from third party companies and from Hogan Lovells, in respect of an adverse costs bill. Some of the bills were made by IIA Tech, a company in which the Claimant has an interest, but which is not the party chargeable. Other bills were paid from a client or (unusually) office account. One invoice was said to have been paid on the same day it was raised. One payment is credited against a costs order paid from an account at another solicitors. None of these payments, submits Mr Dunne, satisfy the 'knowledge' and 'consent' requirements for a statement of account.
- The Defendant points out that all payments made relied on a legal fees exception within the WFO, and so they required notification to be given in accordance with the terms of that order. Payments included a receipt from Danelles Limited, a private limited liability company, registered in the British Virgin Islands in which the Claimant had a 100% beneficial interest, from IIA Tech, a company in which the Claimant had both a direct and indirect economic interest, and from Hogan Lovells another solicitor instructed by the Claimant. All these payments were authorised by the Claimant himself or made by companies under his control. Payments made by a party other than the party chargeable are perfectly legitimate, as long as they are made with the knowledge and authority of the party chargeable. This is clear from paragraph 67 of the Lord Hamblen's judgment in Oakwood Solicitors Limited (ibid). Mr Bignell's statement sets out (in, arguably, exhaustive detail) not simply the facts of the payments, but the reality of these payments, as authorised by the court in the WFO, made with the knowledge and consent of the Claimant.
- I am satisfied that the receipts identified by Mr Bignell at paragraphs 33-37 of his statement (HB 384-6) were payments within the meaning of s.70(4) of the 1974 Act. All payments were made in accordance with the court's provision and scrutiny in the WFO. There is nothing irregular or ineffective in payments from a third or non-chargeable party, so long as these payments were made with the knowledge and consent of the client. The evidence adduced (at some length) by Mr Bignell establishes these payments were indeed made with Mr Mehta's knowledge and consent.
- It follows that the court cannot order an assessment of the bills delivered and paid before 23rd May 2023, more than 12 months before the issue of these proceedings on 23rd May 2024.
Special Circumstances
- It is common ground that in respect of the unpaid invoices delivered by the Defendant to the Claimant more than 12 months before the application, the Claimant must demonstrate 'special circumstances', pursuant to s.70(3) of the 1974 Act before the court can order an assessment.
- In Falmouth House Freehold Co. Ltd. v. Morgan Walker LLP [2010] EWHC 3092 (Ch), Lewison J, having reviewed the case law relevant to special circumstances, stated (at paragraph 13) that:
Whether special circumstances exist is essentially a value judgement. It depends on comparing the particular case with the run of the mill case in order to decide whether a detailed assessment in the particular case is justified, and despite the restrictions contained in section 70(2).
- Special circumstances do not have to be exceptional circumstances. As CJ Rowley confirmed in Masters v. Charles Fussell & Co. LLP [2021] EWHC B1 (Costs) (paragraph 60), they can be established by something out of the ordinary course, sufficient to justify departure from the general position under s.70 of the 1974 Act. The assessment requires invariably consideration of the circumstances of the particular case.
- In Raydens Ltd v. Cole [2021] 7 WLUK 539, CJ Leonard, in citing with approval the guidance of Lewison in Falmouth, added (paragraph 20) that:
In many ways, a helpful test is to consider whether there is something in the fees claimed by the invoices, or in the circumstances in which they were charged, which "call for an explanation". If they do call for an explanation or further scrutiny, that is a strong indication where there should be an assessment. This is not the time for the explanation to be given and evaluated in detail. That is the purpose of the assessment procedure and the scrutiny it provides.
- The Claimant cites three potential special circumstances, defined as (i) estimates, (ii) size of the bill(s), and (iii) the fact of significant interim statute bills.
- The Retainer Letter under the heading 'Our Fees in this Matter' (HB 23), suggested the Claimant 'budget for preliminary fees of around £40,000 plus disbursements and specific expenses and VAT at 20%'. This estimate was never reviewed, revised or updated, notwithstanding that the Defendant's total billing for less than a year ultimately exceeded £3m. This billing, moreover, responds to a significant total, one which is outwith the normal and which 'calls for an explanation'. It was noted in Harrod's Ltd v. Harrod's (Buenos Aires) Limited & Another [2014] 6 Costs LR 975 that the regular delivery of interim statute bills could amount to special circumstances, due to the prejudice of timescales running while stressful and complex litigation is ongoing.
- The Defendant responds that the estimate in the Retainer Letter is qualified specifically: 'This is not an estimate of our fees for the whole matter if you decide to proceed, and will not be sufficient to bring the matter to a satisfactory conclusion'. The Claimant was neither unaware nor disadvantaged by the size of the payments demanded by the Defendant, as invoices were delivered on a regular, monthly basis. He was aware exactly of his ongoing liability and although more £3m was billed, this is by no means unusual given the nature and complexity of this (essentially international) dispute.
- I am not satisfied that the Claimant has demonstrated any matters which 'call for an explanation' or the scrutiny of the court. Pursuant to the retainer, the Defendant delivered regular, itemised invoices that exhibited very detailed breakdowns of the profit costs and disbursements that the Claimant had incurred during each relevant period. He was aware, in other words, of his ongoing, accumulating liability, and paid almost 80% of the invoices rendered. There is nothing, on the particular facts of this case that leads me to find that special circumstances exist.
- It follows the court cannot order assessment of any of the unpaid invoices delivered more than 12 months before the application in May 2024.
Summary of conclusions
- My conclusions, in summary, are as follows:
(i) The retainer concluded by the Claimant and Defendant on (or about) 22 June 2022 provided for the delivery of interim statute bills.
(ii) The invoices delivered by the Defendant to the Claimant between 22nd June 2022 and 25th May 2023 were interim statute bills.
(iii) The Claimant is not entitled to invoke the 'fair and reasonable' jurisdiction at ss.59-63 of the SA 1974, as the retainer adopted the separate regime at ss.69-71.
(iv) The Claimant is not entitled to an assessment of the invoices that were delivered and paid before 23rd May 2024.
(v) The Claimant is not entitled to any assessment of the unpaid invoices, as no special circumstances arise in this case.
(vi) The Claimant is entitled to an assessment of invoice 460369 dated and/or delivered on 25th May 2023, as stated in paragraph 5 of the Order dated 30 July 2024.
- After handing down this judgment, I will liaise with the advocates as to the conclusion of the assessment and the determination of the outstanding, ancillary issues.
