In Sweeney v Wise Solicitors Ltd [2022] EWHC 2314 (SCCO) Costs Judge Rowley dismissed a claimant’s application for an assessment of costs against his former solicitor.
Background
The claimant instructed the defendant firm of solicitors in a personal injury action. In that action he received £3,000 by way of interim payment. This was sent to him, together with a note that any deductions would be made at the end of the case.
At settlement on 26 July 2021, the claimant then received a further £10,000. The defendant deducted 25% of the total damages by way of fees (that is 25% of £13,000). The claimant took umbrage, stating that he expected the deduction to be 25% of the £10,000.
In response the defendant provided invoices breaking down the fees and the deduction. The claimant told the solicitors that if the deduction was not discounted then he would bring an action to recover the whole of the 25%. The defendant declined and the claimant was directed to consider the agreement that the claimant had signed up to at the commencement of the claim.
The claimant then signed a consent form allowing the defendant to pay to him the settlement damages, less the 25% deduction on 100% of the damages.
The claimant contacted a third party firm to bring a claim against his former solicitor who then issued an application under s70 of the Solicitors Act 1974 seeking an assessment of the costs. However, they did not bring the claim until more than 30 days had elapsed since the defendant had provided the invoices, in breach of the time limit provided for by the Act.
The defendant solicitors sought to strike out the action on two, different grounds.
First ground
It was argued that the invoices could not be assessed as bills because they had not been signed and they had been provided by email.
The judge found that final statute bills had been delivered to the claimant and so he was entitled to bring s70 proceedings in principle based upon the invoices delivered.
The judge provided his reasoning, including the following:
“Where, as here, the client is in possession of invoices which are ostensibly suitable for assessment under the Act, the absence of a signature by the solicitors seems to me to be of no consequence. As was expressed by the Court of Appeal in Ex Parte d’ Aragon [1887] 3 TLR 815, and referred to in Parvez, relying on a lack of signature is not an attractive device for a solicitor to seek to avoid the scrutiny of his bill by the court when requested in time by the client to do so.”
“S70 requires the bill to be delivered but is not prescriptive as to how that delivery is undertaken. Consequently, there is also no need for me to consider the question of whether a bill can be delivered electronically without the consent of the recipient.”
Second ground
It was then argued that the action seeking an assessment of costs was issued more than 1 month after the defendant had provided the invoices, in breach of the time limit provided for by the Solicitors Act 1974. The assessment could therefore continue only if the claimant could show special circumstances that allowed him to bring a claim out of time.
The judge confirmed that a client needs to agree to monies being applied to pay the bills. “Mere acquiescence” is not sufficient and the existence of the retainer between solicitor and client is not sufficient in itself either.
In this case, however, the claimant had signed an authority within 8 minutes of receiving it on 26 July 2021. That authority specifically stated that the claimant understood and consented to the deductions and that he further understood that he was not liable for any other shortfall in the solicitors’ charges. The judge considered whether the claimant agreed to the deduction. Because he signed an authority form it was perfectly clear that he did. The judge inferred that:
“…the claimant simply wanted to hold onto as much of his damages as possible because he was not satisfied with the end figure. That view might be entirely reasonable in itself but it does not support an argument that the claimant was pressured into authorising the solicitors to retain monies from the damages.”
The judge found the bills had been paid on 26 July 2021. The defendant had therefore needed to issue proceedings by 25 August 2021. Proceedings were, in fact, issued after that date.
Whilst the breakdown provided did confirm the time limit, the judge found that solicitors are not under any obligation to inform the client of the time limits in relation to the assessment. He relied upon the very recent case of Richard Slade and Company LLP v Erlam [2022] EWHC 325 (QB) . In this case HHJ Gosnell, sitting as a Judge of the High Court, expressed the view that previous case law did not say that a solicitor should tell the client that. If such a bill had been delivered, this started the clock running for the purposes of an assessment under the Act. He pointed out that it was not normal for provisions explaining the legal consequences of contractual terms to be applied into a contract unless there was some additional statutory or regulatory obligation to do so. . If there had been any perceived need for consumer protection, it had not resulted in any change to the Act or other regulatory reform.
The judge found that the defendant was aware of his rights, but did not bring the proceedings in time.
“There is nothing to which he can now point to cause the court to exercise its discretion in holding that any special circumstances exist.”
Accordingly, the defendant’s application succeeded and the claimant’s application under s70 was dismissed.
Andrew Crisp is a Costs Lawyer in the Costs and Litigation Funding Department at Clarion Solicitors.
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