“39. In Erlam, extracts from two cases emphasised the hardship to a client of receiving interim bills whilst being represented in an ongoing adversarial case as follows: “(i) In Harrod’s (Buenes Aires) Ltd v Another [2014] 6 Costs LR 975, the prejudice involved in receiving interim statute bills rather than requests for payments on accounts was recognised by Mr Justice Jacob: “Much more significantly, it fails to take into account the modern practice of solicitors sending bills on a regular basis which are complete bills, not interim bills. That causes difficulty when you have litigation which is ongoing. The client is called upon by these provisions to challenge an interim bill within one month, if he wants to do it as of right; and if he does not challenge it within 12 months then he has to show ‘special circumstances’ to challenge his solicitors’ bill. That puts him in an impossible position. Either he challenges his solicitors’ bill - the very solicitor who is now acting for him - and continues using that solicitor at the same time; or he has to change solicitor, all in the middle of litigation when he is facing another enemy. It may well be that the court would regard ongoing litigation as, itself, ‘special circumstances’. (ii) In Masters v Charles Fussell and Co (unreported) Costs Judge Rowley recognised the same problem; “The Draconian nature of the time periods in limiting a client's ability to obtain an assessment of a solicitor's statute bill has led the courts to require solicitors to ‘make it plain’ to their clients if they intend each bill to be a self-contained bill for a period and for which the time limit for challenge begins to run immediately.”
“56. The case law draws attention to how onerous it is to allow an arrangement whereby a client would have to preserve their ability to have a statutory challenge to the solicitors' fees by bringing proceedings against their solicitor whilst they are acting in adversarial proceedings against "an enemy". This has the capacity to impose significant pressure on the client. At the very time when they need the loyalty and commitment of the solicitor, they risk losing all of that by being in battle both with the enemy and with the person who ought to be their friend, namely their solicitor. Further, whilst the pressure of one battle can be great, the pressure of having to wage two battles at the same time might be much greater. 57. These considerations are telling in cases where there is any ambiguity. That might arise in circumstances where there is an ambiguous consent to rendering interim statute bills. It might arise where there is another attempt to say that there was an entitlement to render such bills, such as where there has been a natural break in the proceedings or where conduct, even acquiescence, is said to have given rise to an entitlement to render such bills. It is in such cases that the impact of being forced to have an assessment of fees against a solicitor has been a telling consideration to the effect that any such right may be limited to be a right to request payments on account, rather than to render interim statute bills. It follows that the situation described in the paragraph immediately above has led to an inability to establish interim statute bills. 58. The Respondent submits, and I accept, that it is necessary to be cautious about attempts to apply dicta in cases where there is no express consent to interim statute bills warning about the difficulties for a client who unknowingly becomes exposed to the difficulties referred to in cases such as Adams v Al Malik. There may be a difficulty in a case which purports to contain express consent, but where the words are ambiguous. If a solicitor is to rely on express consent, the wording must be clear enough to show a contractual intention to entitle the solicitor to render interim statute bills which are final for the particular stage of the work. The Court will recognise an entitlement to render such bills. 59. An entitlement based on clear wording is what was found in Erlam. It is a particularly pertinent case because the terms are almost identical to the instant case. It is the same firm of solicitors with like terms. A contractual term which is clearly incorporated to the effect that there is an entitlement to render interim bills which are final for the particular stage of the work that is effective. Instead of having an entire contract, the parties are contracting so that there might be stage payments. There is no authority that requires that there should be an explanation of section 70 and how assessments work.The Solicitors Act 1974 (and prior statutes from which section 70 is derived) do not provide any such express obligation, whilst being prescriptive as to what is to be part of a bill. There is likewise no express obligation to this effect in the Code of Conduct. 60. The reasoning that there is no requirement to have informed consent in the Solicitors Act or in the Solicitors Conduct Rules as a pre-condition of an interim bill is telling. The wording of the term is sufficiently clear to tell an informed observer that the solicitor has an entitlement to render monthly bills which are final for the particular stage of work. There was sufficient reasoning in Erlam to make this out, even although the eventual finding was that the terms of the CFA replaced the original retainer. 61. Likewise, the reasoning in Ivanishvili is telling not just in following Erlam and identifying the reasoning in Erlam as not being obiter, but in the entirety of the reasoning at [74-79], as quoted in full above. I find persuasive the reasoning of Costs Judge Leonard at [75] that the question of informed consent " has no bearing upon the appropriate interpretation of a contract of retainer". Likewise, there is force in the reasoning at [77] to the effect that "there is no statutory or regulatory obligation upon a solicitor whose retainer incorporates such a clear contractual term to spell out the full legal consequences of the delivery of such bills." 62. Whilst noting the points made about fighting the solicitor and the adversary at the same time, there are other points which reduce the impact of this, namely: (i) if the interim bill is final, the solicitor does not have the opportunity to seek a higher remuneration at a later stage as a result of the bill being final and not just a request for money on account; (ii) if the bill is to be challenged at the time, then the challenge will occur at a point in time when memories are much more fresh than if the dispute has to be dealt with potentially years later; (iii) in considering fiduciary duties of solicitors, leaving aside professional and duties under the Code of Conduct which are different, Sir Geoffrey Vos MR stated that solicitors act for themselves in negotiating a new fee arrangement with a client and have the freedom to negotiate a new retainer in their own interests. Enhanced obligations such as informed consent arising from a fiduciary duty relationship do not apply where solicitors are stipulating the terms on which they will act: see Belsner v CAM Legal Services Ltd[2023] 1 WLR 1043 at [72]-[81] and especially at [79] and Motto v Trafigura Ltd[2012] 1 WLR 657 at [108]-[110] per Lord Neuberger MR. Further, as Sir Geoffrey Vos MR said in Belsner at [80] "…the consequences of the breach of a professional duty, even one given effect by statute, are different from the consequences of breaches of fiduciary duties." 63. Leaving aside purposive matters, the true construction is that the terms of the contract are sufficiently clear to have the meaning found in Erlam and in Ivanishvili. In a case where the contract terms are clear, and where the express consent is by the express terms of the contract, the reasoning in those cases seems correct. The purposive approach cannot enable one party (or the court) to re-write the terms of the contract or override the express consent of the parties. 64. Where the retainer clearly stated that the parties had made a retainer on terms enabling a solicitor to issue interim final statutory bills, the Court ought to give effect to the contractually agreed retainer and to the entitlement of the Respondent to have negotiated such terms. I conclude that the Costs Judge was entitled to determine the matter, as she did, namely that to find that (a) there was no requirement of informed consent, and (b) the Respondent was entitled to render interim final statutory bills.”
“It is our practice to interim bill cases monthly unless there is a good reason not to. Bills are payable within 14 days unless otherwise agreed. Failure to pay will attract interest.”
“However we charge, we will provide you with details of the time spent and fees incurred to date on a regular basis or on request. We will agree with you the timing and frequency for submission of bills. If for any reason we cease acting for you, unless agreed otherwise, we will charge you for the work done and expenses incurred.”
“Unless otherwise agreed (perhaps in the CCL), we will submit a statutory interim bill for our charges and expenses at the end of every 28 days while the matter is in progress. We may submit other bills if we need to incur substantial expenses on your behalf. We will send a final bill after the matter has concluded.”
“If you have any queries about your bill, you should contact the supervising partner or manager straightaway. Their name appears in our initial letter to you. If you wish to dispute the amount we have charged, you should be aware of the following rights of challenge”
“For my part, I would accept Mrs Giret’s initial submission that agreement ought not readily to be inferred from the mere fact of payment being made in response to the submission of interim bills, not least where, as here, (a) the bills were for the most part in round figures and rendered on a monthly basis, and (b) payments were affected by lump sums rather than being specifically attributable to individual bills. After all, as Bowen LJ pointed out in Re Romer & Haslam (in a passage at p.298 I have not previously cited): Payment on account by the client in respect of the separate bills is not to that each of them was a separate bill of costs under this Act; it may be consistent with a clear understanding between the parties that the ultimate bill sent in should be the ultimate bill of costs, and that the payments were to be considered as made against that bill. It must always be a question of fact whether a document is a separate bill of costs or, so to speak a chapter in a volume. In determining whether a document has been delivered as a bill of costs, it must not be forgotten that the onus of showing that it has been lies on the solicitor..”
“The second, more substantive point, is that on a few occasions a bill will include time spent in a period covered by an earlier bill. The total amount so recorded is£10,860 + VAT about 0.4% of the total billed. The practical explanation is that the bills are generally issued immediately after the end of the billing period and on occasion the lag between time being incurred and it making its way on to the system meant that bits were omitted (the time recording software requires an entry to be “closed” before it is formally allocated). So it is extra work being recorded. Not a change to the charges for the work already billed. The client retains a right to challenge the time and in fact, by including it in the later bill, the time limit for any challenge is extended. More importantly not only is this sort of software issue perfectly common it is de minimis and the law does not trifle with such matters. Subsequent events are irrelevant to the objective meaning of the contract and that this occasionally happened does not mean the relevant earlier bill somehow is deprived of status as a statutory bill. The status of a bill is not contingent on what a future bill might say. All that said, the Firm is equally disinclined to argue about trifling amounts and so readily abandons the costs recorded in overlapping periods (the£10,860 + VAT).”
“60. The test is not whether a given invoice is final for the charges it represents, but whether it incorporates a final charge for the work it represents. Bills may be described as final for the period they cover, but that amounts to the same thing: they are final and complete for any work performed during that period.” “88. … the proposition that the Defendant’s monthly invoices were to be final is inconsistent with the wording of the June 2016 Retainer to the effect that a final invoice would be sent when the work encompassed by the retainer had, or was about to be, completed.” “92. It seems to me that an insurmountable difficulty for the Defendant in pursuing this line of argument is that the monthly bills rendered and paid under the terms of the June 2016 Retainer were rendered by the Claimant and paid by the Defendant under the terms of a CFA which provided that they were not to be final. Payment without demur, under those circumstances, cannot be taken of evidence of an agreement to the contrary.”
“..it is denied that overlap of time periods between bills automatically means that those bills cannot be interim statute bills. It is acknowledged that a statute bill must be a final bill for the period which it covers and therefore that work falling within the period of an interim statute bill cannot be included in a subsequent bill.”
“46. The client argued that certainty is needed. I agree. Properly drawn bills ought in future to state the agreed charges and/or the amount that the solicitors are intending by the bill to charge, together with their disbursements. They should make clear what parts of those charges are claimed by way of base costs, success fee (if any), and disbursements. The bill ought to also state clearly (i) what sums have been paid, by whom, when and in what way (i.e.) by direct payment or by deduction), (ii) what sum the solicitor claims to be outstanding, and (iii) what sum the solicitor is demanding that the client (or a third party) is required to pay. 47. The practice of imposing conditions on the face of a statutory bill is and unhelpful. If conditions are to be imposed, they should be transparent. If, for example, the bill is for£5,000 , but the solicitors wish to say that they will accept£4,000 in full and final settlement if payment is made within 14 days, that should be clearly stated.”
“Unless otherwise agreed (perhaps in the CCL), we will submit a statutory interim bill for our charges and expenses at the end of every 28 days while the matter is in progress. We may submit other bills if we need to incur substantial expenses on your behalf. We will send a final bill after the matter has concluded.”
“The Cs contend that the D did not have an express right to deliver IS bills. That right does not arise clearly and expressly without ambiguity.”
“The Respondent submits, and I accept, that it is necessary to be cautious about attempts to apply dicta in cases where there is no express consent to interim statute bills warning about the difficulties for a client who unknowingly becomes exposed to the difficulties referred to in cases such as Adams v Al Malik. There may be a difficulty in a case which purports to contain express consent, but where the words are ambiguous. If a solicitor is to rely on express consent, the wording must be clear enough to show a contractual intention to entitle the solicitor to render interim statute bills which are final for the particular stage of the work. The court will recognise an entitlement to render such bills.”
“[25] … When dealing with a client's right to seek an assessment of costs from his or her solicitors the Act seeks to strike a balance between allowing a reasonable time for a client to question the quantum of costs whilst protecting solicitors from having to deal with stale allegations of overcharging. Whilst the Act purports to regulate those rights it does not go so far as to oblige the solicitor to advise the client of these provisions in terms, nor to explain in plain English what the actual consequences of the application of those terms are for the client. I am personally sympathetic to the argument that it probably should. [28] … In the absence of such amendment however the situation remains that there is no statutory or regulatory obligation to advise a client what the legal consequences are likely to be for him or her when a solicitor serves an interim statute bill. It is not normal for provisions explaining the legal consequences of contractual terms to be implied into a contract unless there is some additional statutory or regulatory obligation to do so as a result of a perceived need for consumer protection. Whilst there may be such a need here it has not resulted in any changes to the Act or relevant regulatory reform. In the absence of such, I take the view that if there is a clear contractual term reserving the right of a solicitor to deliver interim statute bills then he is entitled to do so, without having to spell out what the legal consequences of such an act would be for the client. [29] In this case the provision reserving the right to deliver interim statute bills is set out in paragraph 15 above. The wording is clear, and in my judgment, contains no room for ambiguity. It makes it clear that they "are detailed bills and are final in respect of the period to which they relate" which is sufficient explanation to justify the delivery of an interim statute bill in my judgment.”
“[79] Whether a contract empowers a solicitor to render interim statutory bills falls, in my view, to be determined upon the normal principles of contractual interpretation. As HHJ Gosnell found, a solicitor and a client can agree that the solicitor may render interim statutory bills without delving into the legal consequences of that agreement. There is no requirement that the agreement itself should do so, and the client's subjective knowledge of the legal position is not to the point. If the retainer provides for the solicitor to deliver complete, final interim statutory bills for a given period, that will be sufficient.”
“The majority of the bills were sent on a monthly basis and were in a round figure, purporting to cover the work done during that month (or, as the case might be, during the two or three month period to which some of the bills related). To take an example, there was a bill dated3 January 1997 in the sum of£3000 for the “provision of legal services” between6 December 1996 and3 January 1997 , those services then being detailed. There was no question of these bills being submitted as “bills on account”, mere requests for payment on account with each successive bill giving credit for sums paid previously and each being subject to an adjustment in a final bill. Rather each bill constituted a clear demand for payment.”
“54. I heard submissions about the import of the following words, which appear in small print at the foot of each invoice: “You are also entitled to invoke our complaints handling procedures and may be entitled to have our charges reviewed by the court by way of the assessment procedure under sections 70, 71 and 72 of theSolicitors Act 1974 .” 55. It seems to me that wording (and similar wording in the June 2016 Terms) is entirely neutral, and has no bearing upon the status of the invoices. A complaint can be made about anything and the word “may”, in relation to the possibility of detailed assessment, leaves the status of the bill entirely open. It has the appearance of standard wording that can be attached to any invoice without leaving the solicitor open to accusation of misleading the client or leaving the client uninformed.”
“Whether in the case of a series of bills each bill has been sent in as a final bill, or whether they are mere statements of account showing how far the expenses have gone up to the time of sending them in, is a question of fact to be determined on the evidence in each case, and it is a question which cannot be determined in any case upon the finding of the Court in any other case. The Court cannot lay down rules as to what is conclusive evidence binding subsequent Courts in subsequent cases; neither in equity nor in Common Law Courts can one judge bind another on a question of fact, whether the facts may or may not look exactly alike. It becomes, therefore, a question of fact in the present case whether the solicitors ever sent in a final bill before the last one.”
“40. There was a reference by HH Judge Gosnell in Erlam to the case of Vlamiki v Sookias and Sookias[2015] EWHC 3334 (QB) . Vlamaki was different from the instant case in that it was conceded in that case that any ambiguity on a fundamental aspect of the terms and conditions that cannot otherwise be resolved is to be determined against the solicitors: see the judgment in Vlamaki at [15-16]. This reflected the approach taken by Spencer J in Bari v Rosen [2012] 5 Costs LR 851 at [33-35]. In Erlam, HH Judge Gosnell recorded without expressing a different view Mr Williams KC’s submission that Vlamaki at [23] “is an example of a case where there was ambiguity in the retainer letter and both the Master and the Judge on appeal found that the retainer did not say that each interim bill would be a final bill for the period it covered. There was no additional finding that the client needed to know what the legal effect of that was”
“13. The relevant principles of law and practice governing the issue and assessment of solicitors' bills of costs may be summarised as follows for present purposes. Where a solicitor issues to his client a bill of costs which complies with the requirements of theSolicitors Act 1974 it is known colloquially as a "statute bill".Section 70 (1) of the Act gives the client the right, within one month of delivery of the bill, to apply to the High Court for the bill to be assessed, without requiring any sum to be paid into court. If no such application is made, the absolute right to assessment is lost. However, if a statute bill has not been paid and the client applies to the High Court for assessment of the bill within twelve months from delivery of the bill, the combined effect of section 70 (2) and (3) is that the High Court may allow assessment (and I am advised by my assessors usually does allow assessment), on such terms as the court thinks fit. If the bill remains unpaid and 12 months have expired from delivery of the bill, the court may only order an assessment if special circumstances are shown. 14. The position after a statute bill has been paid is somewhat different. The client still has the absolute right to an assessment before the expiry of one month from delivery of the bill. After that, but only up to 12 months from the date of payment, if the client applies for assessment, special circumstances need to be shown. No assessment at all can be ordered after the expiration of 12 months from payment. Section 70(4) creates an absolute bar. For completeness I should mention that there are additional provisions where the solicitor has obtained judgment on the bill, but this does not arise in the present case. 15. The basic principle is that a solicitor's retainer is normally an entire contract under which the solicitor is entitled to claim remuneration only when all the work has been completed or the retainer has been terminated. A solicitor is not entitled generally to any payment on account of his costs other than disbursements. However, a solicitor may contract with his client for the right to issue statute bills from time to time during the currency of the retainer. Such bills are known as "interim statute bills". They are nevertheless final bills in respect of the work they cover, in that there can be no subsequent adjustment in the light of the outcome of the business. They are complete self-contained bills of costs to date. 16. Interim statute bills issued during the currency of the retainer can arise in only two ways: by agreement, as already explained, or by natural break, i.e. at a natural break in protracted litigation or other work. It is common ground that none of the bills in the present case was issued at a natural break in the work conducted by the solicitor for the client. The defendant's case is that he had a contractual entitlement to issue interim statute bills because of the terms of the retainer. 17. Even if there was a contractual right to issue interim statute bills, it would be a question of fact whether any individual bill issued to the client was a statute bill. If there was no contractual entitlement to issue an interim statute bill, any interim bill issued could be no more than a request for payment on account.”
“However we charge, we will provide you with details of the time spent and fees incurred to date on a regular basis or on request. We will agree with you the timing and frequency for submission of bills. If for any reason we cease acting for you, unless agreed otherwise, we will charge you for the work done and expenses incurred.”
“Unless otherwise agreed (perhaps in the CCL), we will submit a statutory interim bill for our charges and expenses at the end of every 28 says while the matter is in progress. We may submit other bills if we need to incur substantial expenses on your behalf. We will send a final bill after the matter has concluded.”
“53. In my view this was an error with no real significance. I am unable to accept Mr Mallalieu’s suggestion that it evidences an understanding on the Defendant’s part that it was free to render more than one bill for the same period.”